Australian house prices have more than doubled as rates rise to 4.6%

The Reserve Bank raised the cash rate to 4.6% in an attempt to tame persistent inflation, a level not seen since October 2011 when the rate stood at 4.75%. At that time, median house prices were around $599,000 in Sydney, $473,000 in Melbourne, $458,000 in Brisbane and $460,000 in Perth, roughly half the cost of today’s market. Research director Tim Lawless of Cotality notes that house values have more than doubled over the past 15 years while wages have risen only about 49%, pushing the national price-to-income ratio from 6.5 to 8.7 and raising typical mortgage repayments from 36% to 51% of pre-tax income.

Household debt has also climbed from 161% to 178% of disposable income, making borrowers more vulnerable to further rate hikes. Home-buyers are responding by trimming discretionary spending, fixing portions of their loans, or seeking cheaper properties, although mortgage arrears remain relatively low for now. Individual stories, such as a Melbourne couple adjusting their budget after fixing a loan and a single Sydney owner monitoring expenses, illustrate the broader pressure on Australian households.