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Analysis of Australian house prices over the past 50 years shows just how different it was for previous generations attempting to buy a home.
Over the past 50 years, house prices in Australia have surged at rates that far outpace wage increases, as evidenced by a new report.
According to analysis from Money.com.au, since 1975 the average home price in Australia’s capital cities has risen by 3,435 per cent, while median full-time wages have increased by only 1,183 per cent.
Peter Drennan, a research expert at Money.com.au, said that the firm’s data paints a clear picture of housing affordability at an all-time low.
“The Silent Generation and Baby Boomers bought homes when prices were just four to five times the median wage, while today’s families are paying double to triple that,” he said, noting that the historic gap underscores a new reality for home buyers.
In Sydney, housing prices have climbed by 4,645 per cent. The median home price has increased from just $34,000 in 1975 to $1,627,625 in 2024 – a price-to-income ratio that has nearly quadrupled.
Drennan highlighted that today’s buyers face the necessity of two incomes to service housing payments, as well as a higher price-to-income ratio when buying.
“Even with two full-time incomes, buying an average house in Sydney today means facing house prices at 9.5 times the median wage,” he explained.
Considering shifting interest rates, Money.com.au’s data revealed that mortgage repayments in Sydney now require 143 per cent of the national median monthly wage, up from 44 per cent five decades ago.
Brisbane has experienced a similar increase with house prices climbing by 3,801 per cent, increasing the price-to-wage ratio from four times in 1975 to 11 times today, with prices climbing from $23,700 to $924,498 now. The city’s monthly mortgage repayment now consumes 81 per cent of the average wage, compared to 31 per cent five decades ago.
Money.com.au’s property expert, Mansour Soltani, attributed Brisbane’s growth to the recent pandemic-driven population surge, alongside the early 2000s mining boom in North Queensland, which attracted business and economic benefits to the state.
Melbourne has also transformed over the past 40 years, with prices growing by 3,496 per cent. From a median of $28,700 in 1975, prices have now exceeded $1 million, with mortgage payments taking up 91 per cent of monthly wages, up from 37 per cent.
Soltani explained that this growth was fuelled by economic expansion and population influx in the 1980s and 1990s, leading to regional and interstate migration due to increasing affordability pressures.
Adelaide’s market has been relatively steady, according to Soltani, and is “building a reputation as a stable and affordable choice”.
Adelaide’s housing market has increased by 3,351 per cent, lifting the median price from $26,150 to $902,332, 10 times the median annual wage, compared to four times in the past. In 1975, monthly mortgage repayments in South Australia’s capital were 34 per cent of the median wage, but today they consume about 70 per cent.
Meanwhile, Perth’s housing prices have grown by 3,075 per cent, from $24,500 in 1975 to $777,921 in 2024, now nine times the median annual wage. Monthly mortgage repayments now require 68 per cent of the median wage, more than twice the share five decades ago.
Soltani noted that Perth’s current housing shortage has intensified competition, driving prices even higher.
In Canberra, home prices have surged 3,024 per cent since 1975, pushing the median price up from $33,600 to $1,049,719. Mortgage repayments now account for 92 per cent of the median monthly salary, compared to 44 per cent in the 1970s.
This price is now 12 times the median annual wage, compared to five times in 1975.
Soltani attributed Canberra’s price surge to limited land releases, stable employment, and government investments.
Hobart, though experiencing the slowest growth among capital cities, has still seen 2,657 per cent from $25,850 in 1975 to $712,648 today, eight times the median wage, up from four times.
In Hobart, average monthly mortgage payments now require 63 per cent of the median wage, up from 34 per cent in 1975.
Soltani noted that Hobart remains relatively affordable compared to Sydney and Melbourne, but has still seen a price surge of 101 per cent over the last decade.
The 50-year surge in home prices across Australia’s capitals represents a dramatic shift in affordability, as home ownership becomes more challenging under the weight of decades-long price increases.
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