Australia housing affordability reaches critical levels

New research indicates severe housing stress across Australia, with significant financial strain affecting both renters and homeowners. An Everybody’s Home survey found that 76 per cent of respondents would need to make budget sacrifices if their rent or mortgage increased by just $20 per week. Specifically, 41 per cent could not afford such an increase, with 27 per cent reporting they would have to cut back on essentials like food, medication, or utility bills.

Complementary data from PRD shows that mortgage repayments now consume 50.9 per cent of average family income. This peak in housing affordability pressure is contributing to a more cautious property market, characterized by longer selling periods, softening property prices, and weakening buyer sentiment. Average housing prices have declined 1.6 per cent from their March peak, with notable downturns in Sydney and Melbourne.

The financial pressure is impacting long-term life decisions, with many Australians delaying retirement, further study, or home ownership. Respondents also reported coping by reducing energy use, limiting travel, and avoiding medical appointments.