Housing affordability in Australia has entered a worrying phase. Both renters and buyers now report that the percentage of income going to shelter feels unprecedented. Rising capital values and punishing mortgage rates have combined to squeeze household budgets to their outer limit.
Home prices are still rising:
Data from the past decade shows that property values are far from peaking. Sydney home buyers, for instance, faced an average price of roughly A$615,000 in 2013; by late 2023, that bar had jumped to almost A$1.3 million. Melbourne and Brisbane, while trailing Sydney, posted median figures close to A$840,000 and A$830,00,0, respectively. Regional markets, once thought of as bargain territory, have also logged their own steady price appreciation.
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Mortgage Costs Growing Faster than Rents
Beginning in early 2021, the accelerating cost of servicing a home mortgage outpaced rental-price growth. Spiking interest rates lifted monthly principal-and-interest repayments and left many borrowers with pinched budgets. In New South Wales, the bite has been sharp enough that mortgage outlays now consume almost half of some households’ disposable income.
Australian Bureau of Statistics (ABS) data for the 2019-20 financial year listed 1 million-plus households in so-called housing stress, defined as spending more than 30 % of their gross earnings on shelter. Within this cohort, owner-occupiers with a loan and private renters accounted for the largest shares, hinting at a split-security crisis.
Rates for new leases have also surged, a phenomenon that quickened during the pandemic recovery. Advertised rents in the capitals jumped, on average, 10 % between early 2022 and early 2023. Perth recorded the steepest climb by 13.2 %, followed closely by Melbourne at 12.0 %; only Hobart and Canberra logged price declines.
Early 2024 official numbers suggest that no capital city, except Hobart, has escaped the rent upswing. Canberra, which usually sits at the lower end of the spectrum, still posted a 1.7 % increase. In Perth, the figure was 9.9 %, underscoring how tight the rental market has remained outside the national capital.
House Payment Ratios
Research shows that New South Wales residents dedicate a larger slice of their wages to housing than anyone else in the nation, tipping the scale at an average of 14.7 %. Tenants feel the pinch even more. In contrast, households clustered in Western Australia manage to pay roughly 12.1 % of their income toward housing.
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Rentals Becoming Scarce
The Rental Affordability Index now places most Australian suburbs in the moderately unaffordable bracket, a label economists attach when rent claims close to 30 % of take-home pay. Sydney, Hobart, and selected postcode bands in Queensland rank among the most brutal hit, though renters in Melbourne, particularly those on Lonsdale Street and its vicinity, are discovering that the metro region is the least painful option, even if it too is losing ground.
Households living on very low incomes bear the sharpest hurt. In the three years stretching from 2019 to 2020, nearly 45.1 % of those renters encountered what authorities label rental stress inside the capital cities; the figure drops to 36 % once rural and regional domains are counted.
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Escalating home values and upward-leaning rents are stacking the deck against anyone trying to rent or buy. The journey to obtain a mortgage has stretched to a record length, yet tenants are far from secure because rental rates continue to climb. Policymakers, advocates, and researchers alike warn that fresh support mechanisms are no longer optional; they are urgent if the housing crisis is to be kept from deepening even further
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