Summary:
- Australia’s housing market has hit record highs, creating major challenges for homebuyers and renters due to high prices and tight supply.
- In Perth, unit prices are rising faster than house prices, with unit values projected to climb 15% by 2025.
- National property prices reached an all-time peak in June 2025, driven by falling interest rates, investor growth, and government incentives.
- The country faces a worsening rental crisis, as rents surge beyond wage increases and access to social housing continues to decline.
- Affordability is now a crisis affecting both large cities and regional areas nationwide.
- Structural factors like zoning restrictions and speculative buying are worsening accessibility and affordability issues.
Australia’s housing market continues its upward climb, reaching record highs that are reshaping urban landscapes and deepening social challenges. Across the country, prospective homebuyers describe a mounting sense of frustration as they are repeatedly outbid, while renters contend with soaring costs and scarce availability. In cities like Perth, surging demand and constrained supply are pushing both house and unit prices to new peaks, highlighting a broader national crisis in housing affordability.
In Western Australia’s capital, a clear pattern is emerging: units are now outpacing houses in terms of price growth, as affordability concerns shift buyer interest toward smaller dwellings. According to data from the Real Estate Institute of Western Australia (REIWA), unit prices in Perth are forecast to grow 15% in 2025, ahead of a projected 10% increase for houses. That trend is already taking shape, with the median unit price rising 2.9% in the last quarter to $540,000, compared to a 1.4% increase for houses, which now sit at $786,000.
“Affordability pressures are pushing more buyers towards units, particularly villas and low-rise apartments,” noted REIWA President Suzanne Brown. She added that these types of properties now offer “the best combination of price and liveability,” especially for first-time buyers and downsizers locked out of detached housing.
Nationally, Australia’s property values hit an all-time high in June 2025. Growth is accelerating across many urban centres, buoyed by a combination of economic and policy factors. PropTrack data shows national dwelling prices went up 1% in the second quarter alone, the strongest quarterly performance in more than six months. Annual growth now sits at 4.6%, raising the median national price to $905,076.
Analysts attribute much of this growth to falling interest rates, renewed investor activity, and a string of supportive government initiatives. These include homebuyer schemes with smaller deposit requirements and relaxed lending criteria, which have collectively reenergised demand. Consumer sentiment has surged in response, with Westpac reporting a significant rise in auction clearance rates, now at their highest point in over a year.
Still, the market’s trajectory varies across cities. Perth and Adelaide remain the country’s strongest performers, helped by robust population growth and a shortage of housing stock. Melbourne, by contrast, has seen more muted growth, weighed down by higher listings and regulatory shifts affecting investors.
Parallel to the homebuying struggle is a worsening rental crisis, impacting both affordability and housing security. Over the past decade, rents in Adelaide have soared by an estimated 81%, followed closely by Hobart (76%), Brisbane (66%) and Perth (63%). Across all capital cities, the median weekly rent has jumped from $473 in 2015 to $742 today—a 57% increase that exceeds wage growth over the same period.
At the same time, access to social housing has declined. Only 4.1% of all dwellings are now part of social housing programs, down from 4.7% in 2013, despite growing demand. Rising interest rates—thirteen consecutive hikes since 2022—have further strained household budgets, driving up repayments for homeowners and adding to upward pressure on rents. In Sydney, for instance, home values have more than doubled over the past decade, with the median house now costing $1.4 million.
Background:
Here is how this event developed over time:
- 2013: Social housing made up 4.7% of Australia’s total housing stock.
- 2015: The national median weekly rent was $473.
- 2022: The Reserve Bank of Australia began a series of 13 interest rate hikes, increasing mortgage burdens.
- 2024: A Swinburne University report highlighted severe emotional and financial stress among young Australians due to housing insecurity.
- Late 2024: The national housing market posted its fastest quarterly growth since this period.
- June 2025: National dwelling prices reached record highs with 1.0% quarterly growth. PropTrack reported a 4.6% annual price increase, lifting the median value to $905,076. Perth’s median unit price climbed to $540,000; median house prices hit $786,000.
- 2025: Perth units projected to grow 15% versus 10% for houses. Capital city rents rise to $742/week—up 57% since 2015. Social housing stock fell to 4.1% of total housing.