The cut Aussies are begging for – and it’s not from the RBA

Everyone’s talking about interest rates, but there’s a hidden crisis brewing in the Australian property market.

It’s not just about getting a mortgage; it’s the relentless surge in the ongoing costs of owning a home that’s crippling families and reshaping the real estate landscape.

New analysis from Buyersagent.com.au has exposed the shocking truth: the cost of simply living in a property – including council rates, insurance, utilities, and essential maintenance – has exploded, far outpacing wage growth and leaving homeowners struggling to keep up.

ABS data reveals that in 1964, these expenses accounted for a manageable 12.6 per cent of household spending.

Today, that figure has nearly doubled to a staggering 24.1 per cent, a 91 per cent increase.

This means that housing has now become the single largest household expense, eclipsing even the cost of food, clothing, and other essentials.

The average Australian family is now forking out a whopping $28,417 each year on these essential housing expenses.

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Source: Buyersagent.com.au

If housing costs had remained at 1964 levels, that figure would be just $14,857, leaving families with an extra $13,560 to invest in their future.

Buyersagent.com.au CEO, Shaun McGowan, said escalating costs of maintaining a home were forcing families to make tough choices.

“Every extra dollar spent on housing expenses like rates or utilities is a dollar that can’t go towards family holidays, education, or building savings,” he said.

“Housing has gone from the third-largest household expense in the 1960s to the top spot today.

“This shift has fundamentally changed how Australian families allocate their income and their long-term financial security, and it’s making it harder for first-home buyers to get a foot on the ladder.”

Council rates are also becoming an increasing concern, with some Aussie councils approving rate hikes in the double digits for the 2025-26 financial year.

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Source: Buyersagent.com.au

This includes North Burnett Regional Council in Queensland, which implemented a significant 25 per cent rate increase for the financial year – which amounts to more than $800 per year for residential ratepayers.

This increase is part of their $69 million budget and surpasses the 20 per cent increase recently announced by Townsville City Council for some owner-occupiers.

Pensioner Colin Boot, who was in the public gallery for the budget meeting at Gayndah Community Hall in June, told the ABC that he would have to cut down on other expenses.

“I just can’t see where we’re going to get that extra money…the only thing I can see is (cancelling) insurance,” the 81-year-old said.

“Ten per cent – we would have coped with it somehow, but 25 per cent?”

Resident and former councillor Dael Giddens said families would likely cut back on after-school activities.

“You might have had the kids playing cricket and soccer and doing swimming,” she said.

In South Australia, some councils have also hiked rates by up to 10 per cent, including Peterborough District Council, while Southern River ratepayers in WA took to social media to share their shock after receiving their notices earlier this year.

“Just received our council rates notice and nearly spilt my coffee. $2600+ for a humble 4×2 on 450sqm – that’s $200+ a month. Feels like I should be getting a red carpet rolled out with that kind of subscription fee,” one local resident posted to their community Facebook page.

Source: Buyersagent.com.au

The analysis revealed that food spending had also taken a significant hit, plummeting from 16.5 per cent of household budgets in 1964 to just 9.7 per cent today.

This indicates that housing expenses are squeezing the proportion of household spending that was once allocated to groceries and other essential items.

McGowan advises prospective buyers to carefully consider total lifestyle costs when purchasing a property.

He suggests targeting properties priced 10 to 15 per cent below their maximum budget to preserve funds for other expenses, considering homes with existing quality fixtures and fittings to reduce immediate costs, and prioritising locations where lower ongoing costs free up money for discretionary spending.

“Looking ahead to 2025, we expect families to see some relief in their housing repayment burden as interest rates fall, which should free up incomes that have been stretched to breaking point,” Mr McGowan said.

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