How soaring prices, stagnant wages and rising rates have locked a generation out of homeownership — and why it’s getting worse.
A home used to be the foundation of Australian life. For Baby Boomers, buying was straightforward — save for a few years, borrow a modest amount, and build equity. Today, that path has all but closed for younger Australians. House prices have doubled, wages have barely moved, and interest rates hit their highest in over a decade. The following five charts tell the story of how Australia’s housing system became one of the most unaffordable in the world — and who is paying the price.
The Great Divergence: House prices leave wages behind
Indexed growth of dwelling prices, wages, and inflation in Australia (2003–2024, base year = 100)
Sources: ABS Total Value of Dwellings (Dec 2024); ABS Wage Price Index (Dec 2024); ABS Consumer Price Index. All series indexed to 100 at 2003. Dwelling prices approximate mean capital city values. | Note: Hover over lines for values.
“Between 2011 and 2024, median household disposable income grew 56% —
while mean dwelling prices rose 104%.”
— AIHW, Home Ownership and
Housing Tenure (2025)
The gap between what Australians earn and what they must pay for a home has never been wider. While wages tracked broadly alongside inflation, dwelling prices accelerated far beyond both — particularly in the COVID-19 era when record-low interest rates triggered a buying frenzy. Even the subsequent correction of 2022–23 barely dented the structural gap that has built up over two decades.
Squeezed at the bottom: Rental stress by income group
Proportion of households spending >30% of income on housing costs, by income quintile and tenure type (2024–25 estimates)
Sources: AIHW Housing Affordability (2025); ANU PolicyMod microsimulation projections to 2024–25 based on ABS Survey of Income and Housing 2019–20; NHSAC State of the Housing System 2025. Stress defined as >30% of income spent on housing costs. | Note: Hover bars for values. Click legend to filter.
Affordable housing is a concern that is not experienced by all Australians alike. Renters belonging to the bottom income quintile are highly stressed because they have to allocate more than one-third of each dollar earned towards accommodation costs. The financial housing stress for around 1.26 million low-income households was reported in Australia during 2024–25 (AIHW, 2025). Conversely, homeowners – being relatively richer and older Australians – are completely immune to the situation. The affordability issue is highly stratified.
The locked-out generation: Homeownership rates falling across cohorts
Homeownership rates (%) for Australians aged 25–39, compared across generations at the same life stage
Sources: ABS Census 1991, 2006, 2021; ABS Media Release “Owning a home has decreased over successive generations” (20 October 2022). Comparison made at equivalent life stage (ages 25–39) for each generation. | Note: Hover bars for values.
“Baby Boomers aged 25–39 in 1991 were three times more likely than
Millennials in 2021 to own their home outright.”
— ABS, 2022
Successive generations of young people in Australia find it increasingly difficult to own a house compared to preceding generations at the same age level. The problem is even more pronounced in outright homeownership, where Baby Boomers paid off their mortgage in their late thirties while it is nearly impossible for the Millennials to do so. Rental housing, which used to be temporary, has become the permanent mode of housing for many young Australians.
No escape: Affordability crisis spreads from cities to regions
Dwelling price-to-income ratio by capital city and selected regional areas (2015 vs 2024)
Sources: NHSAC State of the Housing System 2025 (national ratio 8.0x); ANZ CoreLogic Housing Affordability Report 2024; ABS Total Value of Dwellings (Dec 2024); CoreLogic/PropTrack city-level median prices. Ratio = median dwelling price ÷ median annual household income. | Note: Hover for values. Red = capital cities, blue = regional areas.
Regional Australia was once an escape valve — a place where those priced out of cities could find affordable housing. That valve has closed. Brisbane’s price-to-income ratio nearly doubled from 2015 to 2024. Regional Queensland and Regional NSW, once genuinely affordable, now sit well above the internationally-recognised “severely unaffordable” threshold of six times income. The crisis has become nationwide.
The triple squeeze: Rates, prices and deposit timelines converge
RBA cash rate (%), years to save a 20% deposit, and mortgage repayment as % of median income (2010–2024) — a multivariate convergence
Sources: RBA Cash Rate Target historical series (rba.gov.au); NHSAC State of the Housing System 2025 (deposit saving time = 10.6 years in 2024); ANZ CoreLogic Housing Affordability Report 2024 (mortgage repayments = 50% of median income in 2024). | Note: Hover for values. Three axes shown — grey bars = cash rate (left), blue line = deposit years (middle), red line = repayment burden (right).
The final chart reveals a cruel paradox. When interest rates were low, house prices surged — making deposits harder to save. When rates rose sharply from 2022, those who had finally managed to buy faced brutal repayment burdens: by 2024, the average new mortgage required 50% of median household income (ANZ CoreLogic, 2024). Saving for a deposit now takes an average of 10.6 years (NHSAC, 2025). For many Australians, no moment has been — or will be — right to buy.
The problem of housing in Australia is not a cyclical market phenomenon; it represents a systemic problem occurring on five fronts at once: houses are priced beyond people’s wages, tenants at the lower end struggle to pay the bills, younger generations own less property compared to their predecessors, there are no safe havens in regional areas anymore, and nothing will bring affordability regardless of whether interest rates are high or low.
This assignment used Claude (Anthropic) for research assistance, code debugging guidance, and narrative structure. All data sourcing, chart design decisions, interpretive analysis, and R code were developed by the student. Use of generative AI is acknowledged in accordance with RMIT Academic Integrity guidelines and RMIT Library AI referencing guidelines.
ABS (Australian Bureau of Statistics). (2022). Owning a home has decreased over successive generations [Media release, 20 October 2022]. https://www.abs.gov.au/media-centre/media-releases/owning-home-has-decreased-over-successive-generations
ABS. (2025a). Wage Price Index, Australia, December 2024. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/wage-price-index-australia/dec-2024
ABS. (2025b). Total Value of Dwellings, December quarter 2024. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/total-value-dwellings
ABS. (2025c). Consumer Price Index, Australia. https://www.abs.gov.au/statistics/economy/price-indexes-and-inflation/consumer-price-index-australia
AIHW (Australian Institute of Health and Welfare). (2025a). Housing affordability. Australia’s welfare 2025. https://www.aihw.gov.au/reports/australias-welfare/housing-affordability
AIHW. (2025b). Home ownership and housing tenure. https://www.aihw.gov.au/reports/australias-welfare/home-ownership-and-housing-tenure
ANZ & CoreLogic. (2024). ANZ CoreLogic Housing Affordability Report 2024. CoreLogic Australia.
Anthropic. (2025). Claude (Version claude-sonnet-4-6) [Large language model]. https://www.anthropic.com
ANU CSPR (Australian National University Centre for Social Policy Research). (2025). Trends and projections for housing costs and housing stress in Australia [Unpublished dataset]. Australian National University.
NHSAC (National Housing Supply and Affordability Council). (2025). State of the Housing System 2025. https://nhsac.gov.au/sites/nhsac.gov.au/files/2025-05/ar-state-housing-system-2025.pdf
RBA (Reserve Bank of Australia). (2025). Cash Rate Target — historical data. https://www.rba.gov.au/statistics/cash-rate/