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Australian Housing Market: No 1980s Boom Expected

  //house-home.news-articles.net/content/2026/02/0 .. alian-housing-market-no-1980s-boom-expected.html
  Published in House and Home on Tuesday, February 3rd 2026 at 20:13 GMT by The West Australian
      Locales: Western Australia, Victoria, New South Wales, Queensland, AUSTRALIA

Sydney, Australia - February 4th, 2026 - A comprehensive new report from CoreLogic has delivered a stark assessment of the Australian housing market, definitively quashing hopes of a property boom reminiscent of the 1980s. The CoreLogic Home Value Index, released today, projects an annual growth rate of just 3.9% for 2025, a figure dramatically lower than the 26.9% average annual growth experienced during the 1980s property surge. The findings signal a shift towards a more sustainable, albeit slower, pace of growth, driven by a complex interplay of economic factors.

For years, many Australians have held onto the expectation that a repeat of the 80s boom was not only possible but probable. Driven by narratives of escalating property values and fuelled by anecdotal evidence of quick gains, this expectation has influenced investment decisions and contributed to a sense of unease amongst potential homebuyers. However, CoreLogic's research director, Eliza Owen, firmly dismisses this notion, attributing the current slowdown to a confluence of pressures impacting both demand and supply.

"The economic landscape today is vastly different from that of the 1980s," explains Ms. Owen. "While we are seeing some price support due to limited new construction, it's simply not enough to ignite a boom. Several key factors are acting as brakes on rapid price appreciation - most notably, higher interest rates and tighter lending conditions imposed by financial institutions."

The impact of rising interest rates is particularly significant. While rates in the 1980s were also high, the crucial difference lies in wage growth. Back then, incomes were rising in tandem with, and sometimes even outpacing, interest rate increases, making homeownership more accessible. Today, however, wage growth has stagnated, leaving many prospective buyers struggling to meet mortgage repayments. This disparity creates a significant affordability barrier, limiting demand and tempering price increases.

Beyond interest rates and income, demographic shifts also play a crucial role. Australia's population growth rate in the 1980s was considerably higher than it is today, creating a robust demand for housing. While immigration continues to contribute to population growth, the rate has slowed, moderating the pressure on the housing market. This slower population increase, combined with changing household sizes, impacts the overall demand for housing stock.

Furthermore, the type of housing being constructed has undergone a fundamental change. The 1980s saw a preponderance of detached houses, catering to a preference for larger land parcels and spacious living. Today, the focus has shifted towards higher-density housing - apartments and townhouses - driven by land scarcity and affordability concerns. This shift, while addressing some supply issues, alters the dynamics of the market and impacts price expectations. Apartments and townhouses typically appreciate at a different rate than detached houses, influencing the overall growth figures.

The CoreLogic report serves as a warning against banking on a rapid resurgence in the housing market. While a complete collapse is not predicted, the era of double-digit annual growth appears to be firmly in the past. Ms. Owen emphasizes, "The market is relatively stable, but expecting a boom akin to the 1980s is unrealistic given the current economic climate. A measured approach to investment and a realistic assessment of affordability are crucial for both buyers and sellers."

The implications of this report extend beyond individual homebuyers and investors. Policymakers will need to consider the findings when formulating housing policies, focusing on strategies that address affordability, increase housing supply, and promote sustainable growth. A continued reliance on outdated assumptions about the housing market could lead to misguided policies and exacerbate existing challenges.

Looking ahead, analysts predict a period of moderate growth, potentially punctuated by periods of stabilization or minor correction. The key will be to monitor economic indicators, particularly interest rates, wage growth, and population trends, to accurately assess the evolving dynamics of the Australian housing market. The dream of quick riches through property investment may be fading, but a stable and sustainable housing market remains a vital component of a healthy economy.