Australia's rising house prices aren't going down anytime soon.
In fact, some financial experts say would-be homeowners will need as much as seven to eight times their annual salary in order to buy.
"Prices are still going up," Phil Rice, a financial specialist and broker with roughly three decades experience in the industry, told Australian Broker. "Ten years ago, the average house was $300,000. Now it's like $700,000 or $800,000. So it's a bigger noose over the necks of people; the commitment is a lot bigger.
"If you go back to the 1970s or 1980s, the normal house price was double that of the normal income," Rice continued. "It was way more affordable. These days, it's seven or eight times your income. So the standard of living has definitely changed, and not in a good way. We are in a crisis."
The median home price in 1970s Sydney was just $18,700, according to financial firm Altus Financial. That number jumped to $76,500 a decade later. In Melbourne, in the 1980s, the median price was under $40,000.
Fast-forward to 2025, and the median home price in five of Australia's capital cities — Sydney, Melbourne, Brisbane, Canberra and Adelaide — have passed the million-dollar mark, according to Domain.
Nationally, dwelling values rose 3.4% annually in the 12 months ending in March, according to CoreLogic, with double-digit increases in Adelaide and Perth. And even since February's rate cuts, prices have risen in Melbourne and Queensland, according to recent PropTrack data.
“Improved sentiment following the February rate cut is likely the biggest driver of the turnaround in values, along with the cut’s direct influence of a slight improvement in borrowing capacity and mortgage serviceability,” said Tim Lawless, CoreLogic economist and head of research at CoreLogic Asia.
Rice said there's likely a variety of factors influencing the market. The most significant, however, is the nation's housing shortage.
"I think the biggest driver really comes down to supply and demand," he said. "There's too many people in the market. No one can find homes, so the homes, whether they're there for sale or for rents, are going up. It's purely that."
Rice added that he doesn't see prices going down anytime soon. In fact, he said property prices are likely to rise to as much as 15 times a person's annual income in the next decade.
"A rule of thumb is that things double every 10 years," Rice said. "If we rely on historical information, that's a fair assumption. So it's not going to be a little bit more [in 10 years]. It's going to be a lot more in 10 years to buy a house."
That's bad news for new entrants in the market, many of whom are struggling to save the necessary deposit with Australia's rising cost of living.
But Nerida Conisbee, Ray White chief economist, said there are regional variations to the housing market.
"Australia does have some of the least affordable property in the world," she said. "But it's not unaffordable everywhere. Sydney is the worst offender. Trying to find a house priced under $950,000 in Sydney is becoming increasingly rare. But go to Melbourne, and it has become more affordable. Go to somewhere like Hobart and prices have actually dropped over the past 12 months."
Home prices in Melbourne and Hobart have fallen 2.6% and 0.4%, respectively, in the 12 months leading up to March, according to CoreLogic data.
Despite skyrocketing prices, Rice said it's still a good time to buy, if borrowers can swing it.
"Because house prices are still rising and there doesn't seem to be anything in the foreseeable future that will make house prices go down," he said.
Rice, who is also a certified broker coach, added that brokers should help borrowers budget for the next one to two years.
"Brokers can help consumers go into a transaction with their eyes open, whether that's through financing, getting into a better deal, consolidating, getting rid of the car loans, or helping them make life easier," he said. "They have to lay out the good and bad about buying property: whether it's affordable, what they'll need to do to be able to maintain their lifestyles. The best thing that brokers can do is prepare the borrowers for what's coming before they make the leap."
