Housing unaffordability in Australia is well understood, using Sydney as an example, in 1980 the median house was 3.5-4 times the median income, and today the median house price is 17-18 times the median income. At face value this appears entirely unsustainable, but there are a few factors that I think are always missing from this analysis.
- In 1980 the population of Sydney was 3.25 million people and the "median" resident would be expected to live in a detached home. In 2026 the population is over 5 million and the "median" resident (at least amongst new buyers) lives in an apartment. The median apartment price is 9 times the median income. - Other major Australian cities have seen similar urban changes.
- In 1980 most home loans were serviced by a single income, today the overwhelming majority of home loans is serviced by a dual income couple, which further adjusts the ratio down to 4.5 times the median dual income.
The point I am making isn't that we don't have a housing crisis, we do and the changes above have significantly impacted the way people live and the way people raise children. My only point is that the current housing crises may actually be far more stable than we think, even in the face of higher interest rates.