Housing Rents and Prices in Australia 2000-25: Facts, Explanations and Outcomes

This paper describes and explains the story of housing rents and prices in Australia from 2000 to 2025 and the major household outcomes. The paper updates Abelson and Joyeux (2023). Drawing on Australian Bureau of Statistics (ABS) data, nationally rents have been a broadly constant proportion of household incomes over the 2000-25 period. On the other hand, real median house prices rose by 90% between 2000 and 2010, and more modestly by 38% between 2010 and 2025. Accounting for housing quality changes, real house prices for constant quality housing rose by about 50% between 2000 and 2025. Our long-run equilibrium model of house prices shows the effects of housing supply, mortgage rates, household disposable income and household wealth on house prices. Our error correction model finds that if an external shock throws the variables out of equilibrium, housing prices adjust to the long-run equilibrium with about 13 per cent of the adjustment occurring in each quarter. Regarding outcomes, housing ownership has fallen substantially for households under 55 due to the rising cost of first home deposits and changing social factors, but average mortgage repayments have not risen as a proportion of average household income. Although nationally rents have been a constant proportion of household income, reflecting income inequality, many low-income households pay more than 30% of their disposable income on rents. Homelessness also remains a major social issue, in part because of the fall in supply of social housing relative to population. Housing policies are discussed in a complementary paper (Abelson, 2025).