No, rental prices in Australia did not go down in 2023; instead, they continued to rise significantly, though the pace of growth started to slow towards the end of the year, with some specific suburbs seeing slight decreases after earlier large jumps. The overall trend remained upward due to low vacancy rates and increased demand, even as the market showed signs of stabilization heading into 2024.
CBRE expect median rents to grow by 24% between 2025-2030, across 53 precincts in Australian capital cities. By 2030, 92% of 2-bed apartments are forecast to have rents exceeding $700/week (33% exceeding $1000/week).
Rate cuts affect demand and supply
But at the same time, it also boosts construction, so you'll get more housing supply," he said. These two effects could largely offset each other, meaning there wouldn't be much of an impact of a rate cut on rents, he said.
More landlords are selling up and exiting the sector, as rising holding and compliance costs, increased government charges, and tax reform uncertainty weigh. Investor groups have warned the sell-off could have “severe” consequences for renters.
Australia's real estate forecast for the next five years (to 2030) points to continued price growth, driven by population increase and housing undersupply, though the pace will vary by city, with Brisbane and Perth expected to lead, Sydney and Melbourne seeing modest gains, and affordable units gaining investor interest. Expect ongoing rental hikes due to tight supply, with potential record highs for property values by 2030, especially in capital cities, amidst tight markets and construction challenges.
The 28/36 rule in Australia is a financial guideline for borrowing, suggesting housing costs shouldn't exceed 28% of your gross monthly income, and total debts (housing, car loans, credit cards) shouldn't surpass 36% of your gross monthly income; it helps prevent mortgage stress by ensuring you can afford repayments, though Australian lenders often use slightly different (sometimes higher) benchmarks like 30% for housing costs, plus an APRA serviceability buffer.
Whether to sell your Australian house now or wait depends on your goals, but strong demand, low stock, and rising prices in many areas suggest a good time to sell, though some forecast a slowdown or shift in early 2025 before potential later growth driven by lower rates, making it a nuanced decision favoring acting sooner if upgrading, or waiting to capitalize on potential spring surges if timing allows, according to 2025 real estate analysis from OpenAgent and other sources, REMAX Success, and Real Estate.
Structural damage (foundations, roof, termites) and poor location (noise, crime, bad schools) decrease property value the most, alongside significant neglect like outdated kitchens/bathrooms, peeling paint, and unapproved renovations, as these signal major costs and headaches for buyers, with factors like proximity to landfills, power plants, or high-traffic roads also causing significant drops.
The 30% rent rule is a guideline suggesting you shouldn't spend more than 30% of your gross or net income on rent to ensure affordability, allowing funds for other essentials like groceries and transport, and is often used by property managers to assess applicants; however, in expensive markets, it's sometimes stretched to 40-50%, or considered outdated by some, but it remains a common benchmark for housing affordability and "rental stress".
Unfortunately, it's likely to get worse before it gets better. There are long lags from new housing commencements to having additional housing available – and for now new commencements are still moving in the wrong direction.
Will Mortgage Rates Ever Go Down to 3% Again? While it's possible that interest rates could return to 3% territory in the future, it's highly unlikely that it'll happen anytime soon. In fact, some experts say it won't happen again without another major economic shock like the one caused by the COVID-19 pandemic.
The Indian government continues to strengthen its support for affordable housing in 2025, making it an opportune year for homebuyers. Key programmes like Pradhan Mantri Awas Yojana (PMAY) remain active, alongside state-level incentives that reduce the cost of purchasing a home.
To buy a $650,000 house in Australia, you generally need a gross annual household income between $100,000 to $140,000, with figures varying significantly by location and lender criteria, requiring a strong deposit (around $130,000 for 20%) and managing loan repayments to not exceed 30% of your income to avoid mortgage stress, often necessitating a joint income or substantial savings, as highlighted by financial experts and data from sources like Fundd, Finder, and Real Estate.
Australia's brutal rental crisis is spreading with unaffordable areas moving from the cities to regional parts of the country. Perth and regional Australia's affordability have plummeted in the past 12 months, fresh figures from National Shelter, SGS Economics and Planning, and Housing All Australia show.
Rental yield expectations vary by property type and location. In Sydney overall, a good gross rental yield is typically considered 3.2%+ for houses and 4.5%+ for units. On the Northern Beaches, recent data shows: Houses – average gross yield around 2.6%, with high-demand pockets achieving closer to 3% or more.
8 ways to increase the value of your home
The 2% property rule is a real estate investing guideline to quickly assess if a rental property could generate positive cash flow, suggesting the monthly rent should be at least 2% of the total purchase price (including necessary repairs); if a $200,000 property can't rent for $4,000/month (2% of $200k), it might not be a strong cash flow investment, helping investors filter potential deals, though it's a simplified metric not guaranteeing profitability and works best in affordable markets.
Property prices are heavily influenced by supply and demand. Put simply, when the supply of houses outweighs the demand, property prices tend to drop. On the flip side, when the demand for houses is higher than the supply of housing stock, property prices may increase.
The hardest months to sell a house are typically December and January due to holidays, travel, and financial caution, with some sources also pointing to mid-winter (June/July in the Southern Hemisphere, Dec/Jan in Northern Hemisphere) because of cold weather, fewer buyers, and dull property presentation. These times see less buyer activity as people focus on celebrations and finances, leading to fewer serious offers and longer listing times.
Using this free income calculator, the approximate income you need to buy a $500,000 home, assuming you need a $400,000 loan, is $77,000 gross per year, excluding superannuation.
The Six-Month Rule
For this exemption to apply, two conditions must be met. First, the property must have been your primary residence for at least three months within the 12 months before selling it. Secondly, you must not have used the property to make assessable income in any way within the 12 months before selling.
Low income in Australia is generally defined as earning less than 50% of the median household income, which translates to roughly under $584/week for a single person or around $1,226/week for a couple with two children, though figures vary and government support has specific thresholds, like the $37,000 cap for the superannuation tax offset. Official poverty lines are set at half the median income, but factors like location (e.g., Sydney) and living costs significantly impact what's considered "low" in practice.