Subject: Why Australian house prices don’t make sense

⚡️ Highlights:

1. Australian housing prices have reached record highs, with the median dwelling price being 8.2 times the median household income in 2025, up from 6.4 times in 2019.

2. The average dwelling in Australia is valued at $1,045,000 as of the September quarter of 2025, up from $668,800 in 2019.

3. Despite a significant increase in mortgage rates, house prices continued to rise, breaking the usual correlation between borrowing capacity and house prices.

4. Factors contributing to the rise in house prices include the 'Bank of Mum and Dad' acting as a significant informal lender, an increase in investor activity, and government incentives like shared equity schemes and home buyer grants.

5. With the expectation of further rate hikes by the RBA, borrowing capacity is expected to shrink as variable mortgage rates rise, potentially impacting the housing market further.

✍️ Leith van Onselen | Full Article

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