Property Prices: Is the Ceiling Still Rising in Australia?
For anyone convinced that Australian property prices simply can’t go any higher — it might be time to think again.
Over the weekend, the Australian Financial Review published a fascinating and timely article comparing Australian real estate prices with global housing markets. In what’s being hailed as the first major study of its kind in 2025, the findings were both eye-opening and surprisingly reassuring for those still wondering whether our market has more room to grow.
The headline?
“High Prices the Global Norm.”
That’s right — while housing affordability continues to be a hot-button issue in Australia, we’re far from alone. In fact, Australia isn’t even in the top five when it comes to the most expensive property markets globally. And for many cities overseas, affordability challenges are even more extreme.
So what does that mean for us here at home?
Let’s dive in 👇
🌍 The Global Housing Snapshot
Four of our capital cities now boast median house prices of $1 million or more, with that number expected to climb to six by the end of the year. Sounds intense? Sure. But it’s still not as dramatic as what’s happening overseas.
Here are some surprising international comparisons (converted to AUD):
Los Angeles: $1.8 million
Paris: $2.1 million
Madrid: $2.3 million
Even on the affordability scale — which measures mortgages as a percentage of income — Sydney trails behind Hong Kong, the world’s most unaffordable city, followed by Vancouver, San Jose, Los Angeles, and Honolulu.
So, in short, the “Great Australian Price Surge” is far from unique. According to Dr Diaswati Mardiasmo, PRD Real Estate’s Chief Economist, the trend is global. “It’s literally almost a copycat between each of the different countries,” she explains. “It does suck for everyone in the world.”
🏗️ What’s Driving It?
The biggest culprit?
Supply. Or rather, the lack of it.
We’re simply not building homes fast enough to keep up with demand. And the problem is made worse by demographic trends:
More people are living alone (26% of Aussie households are single-person — and rising).
We’re living longer.
And we’re still chasing the dream of detached homes with big backyards.
That’s the Aussie way — and we’re not alone. The same preference exists in places like New Zealand and the United States, where cities continue to sprawl outward in search of space.
But even in Europe, where smaller apartments and higher density are more common, prices haven’t slowed. Cities like London, Paris, and Barcelona continue to break affordability records — proving that simply “building up” isn’t the silver bullet many assume it to be.
📉 Meanwhile… What About the Share Market?
On the local front, a new variable has entered the picture: global economic uncertainty.
This week, the Australian share market plunged over 6% in a single day — part of a worldwide sell-off triggered by geopolitical volatility and the latest tariff blitz from former US President Donald Trump.
So what does this mean for property?
There are two schools of thought:
Interest Rates May Fall Faster Than Expected
Lower rates would improve affordability and boost borrowing power, which could support further growth in property values.Financial Pressure Could Increase Listings
If investor portfolios take a beating, we may see more forced sales and higher property stock levels, which could shift pricing dynamics.
🤔 So, What Should Sellers Do Right Now?
In a market this uncertain, the old saying rings true:
“The offer you have today may not be there tomorrow.”
With interest rates, global politics, and economic trends moving fast — sellers need to consider every offer with care. We may be in a high-price environment, but that doesn’t mean things can’t change quickly.
📰 Feature Article Recap
High Prices: The Global Norm
Here’s a quick summary of the key takeaways from the Australian Financial Review’s latest feature:
Housing affordability is a global issue.
Cities like Paris and Madrid are even more expensive than Sydney.
A worldwide housing supply shortage is pushing prices up everywhere.
Single-person households and long life expectancies are straining current housing stock.
Even apartment-heavy cities like London are seeing price surges.
COVID-19-era interest rate cuts globally supercharged demand.
Australia’s slower rate cuts compared to other nations have made our high prices feel even more painful.
💬 Final Thoughts
While property prices in Australia are high, we are very much part of a broader, global trend — not outliers. And although external economic pressures like share market dips and interest rate changes will influence short-term activity, the long-term fundamentals of supply and demand are hard to ignore.
If you’re thinking of buying or selling, it’s never been more important to have the right guidance. The window of opportunity is open — for now.
Let’s talk about how to make the most of it.