The Australian has published fascinating data showing the extraordinary rise in home values this century.
As illustrated below, house prices have soared by between 227% (Darwin) and 570% (Adelaide) over the past 25 years:
Unit prices have experienced similarly explosive growth, rising by between 163% (Darwin) and 600% (Adelaide) over 25 years:
Cotality’s latest housing affordability report showed a massive increase in the national dwelling value-to-income ratio, from 5.2 at the series’ beginning in Q3 2002 to 8.2 as of Q3 2025:
Adelaide and Brisbane, which have experienced the strongest dwelling price growth over 25 years, have also experienced the largest increase in the dwelling price-to-income ratio:
Despite Australia’s official cash rate being lower today (at 3.6%) than it was 25 years ago (at 6.25%), the share of household income required to service a new mortgage on the median-priced home has risen from 27.9% in Q3 2002 to 45% as of Q3 2025:
Again, Adelaide (50.4%) and Brisbane (48.0%) have experienced the largest rise in the cost of servicing a mortgage, reflecting their extreme price growth:
The sharp erosion in housing affordability has been replicated in the rental market following the recent extreme growth in asking rents:
The share of income required to meet the national median advertised rent hit a record high of 33.4% in Q3 2025:
Rental affordability has hit record lows across all major capital city markets, other than Melbourne:
The bottom line is that housing affordability—both to purchase and rent—has badly eroded over the past 25 years.
