As Australia’s housing market continues to reel from years of financial stress, new data suggests a divergence is emerging between mortgage holders and renters — one where homeowners may begin to see relief, while tenants remain trapped in worsening conditions.
Westpac and the Commonwealth Bank have both published figures revealing the extent of the financial pressure felt by mortgage holders in recent years. Westpac noted that between January 2022 and January 2024, the average minimum mortgage repayment surged by 42.2%, equivalent to around $754 a month. Over the same period, average incomes increased by just 8.5% — roughly $641.
Commonwealth Bank figures paint an even starker picture, showing that average loan repayments have climbed by around 60% since the pandemic began, far outpacing the 40% increase in average rent payments.
On the surface, it may appear that mortgage holders have borne the greater cost-of-living burden. However, the path ahead for these two groups appears markedly different.
For mortgage holders, a corresponding 1% drop in mortgage rates would translate into noticeably lower monthly repayments, offering long-awaited breathing room after two years of rapid monetary tightening.
Data from the Australian Bureau of Statistics, highlighted by economist Justin Fabo, indicates net migration accelerated again in early 2025. Simultaneously, dwelling completions remain at decade lows, reflecting years of decline in housing approvals.
The result: persistently tight vacancy rates, particularly in major capitals. With more people entering the country than homes being built, tenants are left to compete fiercely for limited rental stock — a dynamic that is likely to keep pushing rents higher.
To cope, many renters have returned to shared accommodation. Average household sizes in capital cities have rebounded to levels not seen since the early 2000s, according to recent housing data. But this stopgap comes with its own pressures, including reduced privacy, space constraints, and long-term insecurity.
Without substantial changes to migration policy or a rapid escalation in housing supply, Australia’s rental crisis is likely to deepen. Renters will continue to face escalating costs and difficult living arrangements unless demand and supply are brought into better alignment.
For now, the housing affordability squeeze is playing out in two very different stories: one of potential easing for those with a mortgage, and another of continued strain for those without. And unless policy settings shift dramatically, it is renters who may bear the heavier burden in the years to come.
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