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This article looks at new data showing where Australian homes have increased in value more than average wages, with Perth leading the pack. It explores how interest rates and supply shortages are shaping these trends across major cities and regions.

Keywords:

Australia property market, house prices vs income, Perth real estate, Melbourne housing, Sydney property trends, interest rate impact, housing affordability, Ray White data, regional property prices, 2025 real estate trends

Does Your House Earn More Than You?

In Australia’s two-speed housing market, the answer to whether your house earns more than you depends heavily on where you live. New analysis by Ray White reveals a striking divergence across the country: in booming western cities like Perth, homes have delivered bigger returns over the past year than average salaries. Meanwhile, in major east coast cities such as Sydney and Melbourne, wage earners are outpacing house price growth—for now.

Perth: Property Outpaces Pay

Between April 2024 and April 2025, Perth’s median house price jumped by $95,022, rising from $812,482 to $907,504. That growth eclipsed the average annual salary in Western Australia, which sat at $81,568, according to ABS data. The surge in Perth’s housing market is fueled by a severe shortage of new housing stock, ongoing construction challenges, and a long-awaited recovery from its post-mining boom downturn.

“There’s been a bit of catch-up,” said Ray White chief economist Nerida Conisbee. “For 10–15 years, house prices fell in Perth, so prices have jumped to get back to where they should have been.”

East Coast Markets: Wages Win

In contrast, Melbourne homeowners saw modest house price growth of just $13,805 over the year—well below the average income of $76,617. Sydney fared slightly better, with house prices increasing by $52,006, compared to an annual income of $78,512.

Adelaide and Brisbane sat in a more balanced middle ground. Brisbane’s house price growth was just $2411 shy of matching the average income, while Adelaide’s property gain was only $227 short. These markets, having recently emerged from their own mini-booms, appear to be stabilizing.

Interest Rates and Market Sensitivity

Experts point to the Reserve Bank’s interest rate decisions as a key factor behind the disparities. After 13 rate hikes from May 2022 to September 2023, only two cuts have been implemented so far in 2025. While falling rates tend to boost housing demand, Sydney and Melbourne’s high property values have made them more vulnerable to credit tightening, limiting price growth.

“We normally think of people buying expensive houses not needing big mortgages, but some do,” said Conisbee. “And interest rate rises now mean it’s harder to get finance.”

Regional Areas and the Outlook Ahead

The data also shows house price growth lagging behind incomes in many regional parts of Australia. For example, in regional NSW, house prices rose by $26,712, while average incomes were $60,073. Regional Victoria saw even slower growth, with prices up just $11,920 against a $62,300 salary.

Economists remain cautious about the future. AMP’s Dr. Shane Oliver noted that Sydney, Melbourne, Hobart, and Canberra have already peaked, and it’s uncertain whether further rate cuts will reignite rapid property gains.

However, even in slower markets, demand remains buoyed by a lack of housing supply and strong population growth. And while Perth leads now, Oliver warns it could eventually face the same affordability challenges that have tempered east coast markets.