Australian Property Boom Unravels Amid Rising Interest Rates

Australia's property market has experienced a prolonged boom over the past three decades, with prices rising sharply despite periodic downturns. In the past seven years alone, national house prices have increased by roughly 70%, making Australia one of the most expensive property markets in the developed world.

The combination of ultra-low interest rates, a post-pandemic surge in immigration boosting housing demand, and a shortfall in new homes built contributed to price growth. However, when the Reserve Bank of Australia began aggressively raising rates in February 2026, the factors that sustained price growth started to unravel.