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.

In the first quarter of 2025, the house price-to-rent ratio in Australia was estimated at ***, marking a decrease from the same quarter of the previous year. An indicator of how strong the property market is, the house price-to-rent ratio was calculated by dividing nominal house prices by rent price indices. Within the given period, after reaching a peak in the first quarter of 2022, the price-to-rent ratio decreased each quarter until the second quarter of 2023. From then on, the house price-to-rent ratio fluctuated, but largely trended downwards. Is Australia in a property bubble? Many industry experts believe the country is in a property bubble, indicated by the rapid increase in Australian property market prices to the point that they are no longer relative to incomes and rents, followed by a decline. The house price-to-income ratio was on an upward trend between the third quarter of 2022 and the second quarter of 2024. Nonetheless, after hitting its peak, it declined to ***** in the fourth quarter of 2024. Rental property demand In March 2025, the rental vacancy rate, which indicates how many properties are available for rent out of all the rental stock, was relatively high in Melbourne, Canberra, and Sydney. That year, the average weekly rent prices varied across the country depending on the city, with the highest average weekly rents for houses and units in Sydney. Hobart, on the other hand, had the most affordable rental properties across Australia's capital cities.

Sydney topped the residential rental pricing market in Australia in March 2025, with house rent prices reaching an average of *** Australian dollars per week. The average weekly rent for a unit in Sydney was the highest among all capital cities in the country, followed by Brisbane.

Australia’s real house price index increased to 122.4 in the first quarter of 2025. 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 131.1. 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 122.5 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 775 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.

As of September 2024, the average rental yield of units in Darwin was the highest amongst the capital cities in Australia at 7.64 percent. The lowest average unit rental yield was recorded in Hobart, Tasmania, with a rental yield of 4.14 percent.

Australia Housing Affordability Index: Tasmania: Hobart data was reported at 170.300 Index in Jun 2010. This records an increase from the previous number of 166.300 Index for Mar 2010. Australia Housing Affordability Index: Tasmania: Hobart data is updated quarterly, averaging 221.719 Index from Sep 1984 (Median) to Jun 2010, with 104 observations. The data reached an all-time high of 388.953 Index in Dec 2001 and a record low of 134.500 Index in Dec 2009. Australia Housing Affordability Index: Tasmania: Hobart data remains active status in CEIC and is reported by Housing Industry Association. The data is categorized under Global Database’s Australia – Table AU.EB019: Housing Affordability Index: Based on Commonwealth Bank of Australia Home Price (Discontinued). Rebased Index. Replacement series ID: 305196101

Australia Consumer Price Index (CPI): Hobart: Housing: Rents data was reported at 139.400 2011-2012=100 in Mar 2025. This records an increase from the previous number of 138.900 2011-2012=100 for Dec 2024. Australia Consumer Price Index (CPI): Hobart: Housing: Rents data is updated quarterly, averaging 64.100 2011-2012=100 from Sep 1972 (Median) to Mar 2025, with 211 observations. The data reached an all-time high of 144.000 2011-2012=100 in Sep 2023 and a record low of 15.300 2011-2012=100 in Sep 1972. Australia Consumer Price Index (CPI): Hobart: Housing: 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.

Australia Consumer Price Index (CPI): Hobart: Housing data was reported at 172.000 1989-1990=100 in Jun 2012. This records a decrease from the previous number of 172.600 1989-1990=100 for Mar 2012. Australia Consumer Price Index (CPI): Hobart: Housing data is updated quarterly, averaging 95.500 1989-1990=100 from Sep 1972 (Median) to Jun 2012, with 160 observations. The data reached an all-time high of 172.600 1989-1990=100 in Mar 2012 and a record low of 20.300 1989-1990=100 in Sep 1972. Australia Consumer Price Index (CPI): Hobart: Housing 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.I009: Consumer Price Index: 1989-90=100: Eight Capital Cities.

Australia Consumer Price Index (CPI): Hobart: Housing: Utilities data was reported at 121.200 2011-2012=100 in Mar 2025. This records an increase from the previous number of 117.600 2011-2012=100 for Dec 2024. Australia Consumer Price Index (CPI): Hobart: Housing: Utilities data is updated quarterly, averaging 46.900 2011-2012=100 from Sep 1972 (Median) to Mar 2025, with 211 observations. The data reached an all-time high of 128.300 2011-2012=100 in Mar 2024 and a record low of 5.400 2011-2012=100 in Mar 1973. Australia Consumer Price Index (CPI): Hobart: Housing: Utilities 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.