Sep 11, 2026 · 5 min · 5 segments
Australia's housing affordability crisis has reached an alarming new low. But if property prices are falling in many markets, why is housing becoming less affordable? Hotspotting examines the impact…
Terry RyderHost
Housing affordability has fallen to the worst level on record, and the biggest immediate reason is clear.
High interest rates have crushed borrowing capacity and pushed mortgage repayments to levels that Australian households have not experienced for decades.
Now that's the lowest figure ever recorded, even worse than during the GFC when the figure was 14%.
The irony is that property prices have recently been falling in a number of markets.
But that has done little to improve affordability because of the impact of higher mortgage rates, which has been much greater than the benefit provided by modest falls in prices.
Its profligate spending, including its massive expansion of the federal bureaucracy, is a key component of inflation, as the Reserve Bank Governor Michelle Bullock has made clear.
The federal government has also failed to deal with some of the key components of high inflation, including high power prices, high petrol prices and ever rising residential rents.
Housing affordability has fallen to the worst level on record, and the biggest immediate reason is clear.
High interest rates have crushed borrowing capacity and pushed mortgage repayments to levels that Australian households have not experienced for decades.
Now that's the lowest figure ever recorded, even worse than during the GFC when the figure was 14%.
The irony is that property prices have recently been falling in a number of markets.
But that has done little to improve affordability because of the impact of higher mortgage rates, which has been much greater than the benefit provided by modest falls in prices.
Its profligate spending, including its massive expansion of the federal bureaucracy, is a key component of inflation, as the Reserve Bank Governor Michelle Bullock has made clear.
The federal government has also failed to deal with some of the key components of high inflation, including high power prices, high petrol prices and ever rising residential rents.
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