The average price of Australian residential property has risen over the past ten years, and in December 2024, it reached 976,800 Australian dollars. Nonetheless, property experts in Australia have indicated that the country has been in a property bubble over the past decade, with some believing the market will collapse sometime in the near future. Property prices started declining in 2022; however, a gradual upward trend was witnessed throughout 2023, with minor fluctuations in 2024. Australian capital city price differences While the national average residential property price has exhibited growth, individual capital cities display diverse trends, highlighting the complexity of Australia’s property market. Sydney maintains its position as the most expensive residential property market across Australia's capital cities, with a median property value of approximately 1.19 million Australian dollars as of April 2025. Brisbane has emerged as an increasingly pricey capital city for residential property, surpassing both Canberra and Melbourne in median housing values. Notably, Perth experienced the most significant annual increase in its average residential property value, with a 10 percent increase from April 2024, despite being a comparably more affordable market. Hobart and Darwin remain the most affordable capital cities for residential properties in the country. Is the homeownership dream out of reach? The rise in property values coincides with the expansion of Australia's housing stock. In the December quarter of 2024, the number of residential dwellings reached around 11.29 million, representing an increase of about 53,200 dwellings from the previous quarter. However, this growth in housing supply does not necessarily translate to increased affordability or accessibility for many Australians. The country’s house prices remain largely disproportional to income, leaving the majority of low- and middle-income earners priced out of the market. Alongside this, elevated mortgage interest rates in recent years have made taking out a loan increasingly unappealing for many potential property owners, and the share of mortgage holders at risk of mortgage repayment stress has continued to climb.

Sydney had the highest median house value compared to other capital cities in Australia as of April 2025, with a value of over **** million Australian dollars. Brisbane similarly had relatively high average residential housing values, passing Canberra and Melbourne to top the pricing markets for real estate across the country alongside Sydney. Housing affordability in Australia Throughout 2024, the average price of residential dwellings remained high across Australia, with several capital cities breaking price records. Rising house prices continue to be an issue for potential homeowners, with many low- and middle-income earners priced out of the market. In the fourth quarter of 2024, Australia’s house price-to-income ratio declined slightly to ***** index points. With the share of household income spent on mortgage repayments increasing alongside the disparity in supply and demand, inflating construction costs, and low borrowing capacity, the homeownership dream has become an unattainable prospect for the average person in Australia. Does the rental market offer better prospects? Renting for prolonged periods has become inevitable for many Australians due to the country’s largely inaccessible property ladder. However, record low vacancy rates and elevated median weekly house and unit rent prices within Australia’s rental market are making renting a less appealing prospect. In financial year 2024, households in the Greater Sydney metropolitan area reported spending around ** percent of their household income on rent.

Australia’s real house price index fell to ***** in the fourth quarter of 2024. House prices fluctuated over the reported period compared to the base year of 2015, experiencing a sharp increase throughout 2021, with the country’s house price index peaking in the first quarter of 2022 at ***. Prospective homeowners priced out of the market Recent house price increases reflect the ongoing challenges of housing affordability in Australia. Property prices largely outpace income growth, reigniting discussions about whether the country is stuck in a property bubble, a topic that has been debated for over a decade. The country’s house price-to-income ratio hit ***** in the second quarter of 2024, the highest ratio recorded over the past five years, making it increasingly difficult to get on the property ladder. Unaffordable rental conditions Australia’s rental market has also seen challenges, with the rent price index continuing to climb throughout 2024 into the first quarter of 2025, making the prospect of renting less appealing. As of March 2025, the average weekly house rent price in Sydney stood at *** Australian dollars, the highest across the country’s major cities. Canberra, Darwin, and Perth were the next most expensive markets for house rents, while Hobart was the most affordable capital city for both house and unit rent prices.

The house price-to-income ratio in Australia was ***** as of the fourth quarter of 2024. This ratio, calculated by dividing nominal house prices by nominal disposable income per head, increased from the previous quarter. The price-to-income ratio can be used to measure housing affordability in a specific area. Australia's property bubble There has been considerable debate over the past decade about whether Australia is in a property bubble or not. A property bubble refers to a sharp increase in the price of property that is disproportional to income and rental prices, followed by a decline. In Australia, rising house prices have undoubtedly been an issue for many potential homeowners, pricing them out of the market. Along with the average house price, high mortgage interest rates have exacerbated the issue. Is the homeownership dream out of reach? Housing affordability has varied across the different states and territories in Australia. In 2024, the median value of residential houses was the highest in Sydney compared to other major Australian cities, with Brisbane becoming an increasingly expensive city. Nonetheless, expected interest rate cuts in 2025, alongside the expansion of initiatives to improve Australia's dwelling stock, social housing supply, and first-time buyer accessibility to properties, may start to improve the situation. These encompass initiatives such as the Australian government's Help to Buy scheme and the Housing Australia Future Fund Facility (HAFFF) and National Housing Accord Facility (NHAF) programs.

In 2024, one square meter of greenfield land cost an average of 877 Australian dollars in Perth, Australia. This marked a significant increase from the previous year and a recovery from the five-year decreasing trend in land prices for that region witnessed between 2015 to 2020.

Australia Consumer Price Index (CPI): Perth: Housing: Rents: Rents data was reported at 124.200 2011-2012=100 in Mar 2025. This records an increase from the previous number of 122.100 2011-2012=100 for Dec 2024. Australia Consumer Price Index (CPI): Perth: Housing: Rents: Rents data is updated quarterly, averaging 56.300 2011-2012=100 from Sep 1972 (Median) to Mar 2025, with 211 observations. The data reached an all-time high of 124.200 2011-2012=100 in Mar 2025 and a record low of 12.200 2011-2012=100 in Sep 1972. Australia Consumer Price Index (CPI): Perth: Housing: Rents: Rents data remains active status in CEIC and is reported by Australian Bureau of Statistics. The data is categorized under Global Database’s Australia – Table AU.I007: Consumer Price Index: 2011-12=100: Eight Capital Cities.

In February 2025, the Australian city of Perth had a residential rental property vacancy rate of 0.6 percent. The February residential rental property vacancy rate in Perth reached a peak of 5.1 percent in 2017.

In March 2025, the Australian cities of Melbourne and Canberra had rental property vacancy rates of *** percent, respectively. In contrast, the rental property vacancy rate in Hobart was estimated at *** percent in the same month.

In the first quarter of 2025, the office property vacancy rate in the central business district of Melbourne, Australia, was the highest, with a rate of around 19.8 percent. The central business district of Sydney had an office vacancy rate of 15.5 percent in comparison.