Housing in NZ vs Australia: the reality
Sunday, 21 December 2025
Hordes of New Zealanders are heading to Australia in search of a better life, but if they’re expecting cheaper housing options they are sorely misinformed, a housing affordability campaigner is warning.
Christchurch-based Hugh Pavletich, who is one of the original authors of the Demographia International Housing Affordability report, has been campaigning to address New Zealand housing cost issues since 2004.
Over the years he watched with horror as house prices climbed ever-higher, peaking at eye-watering levels in late 2021, and locking aspiring buyers out of the market.
Since then, prices have dropped back nationwide, and Pavletich believes initiatives and reforms advanced by recent governments mean New Zealand is on the right track to getting the crisis under control.
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But that’s not the case in Australia, he says. “House prices have kept going up, and affordability has gotten much worse in Australia, but people don’t seem to be aware of it.
“The widening gap between the two markets isn’t being discussed, so lots of people migrating to Australia aren’t making informed decisions on housing costs. What they encounter might force them to rethink their move before long.”
Cotality Asia Pacific head of research Tim Lawless agrees there are big differences between the housing markets in New Zealand and Australia, and what buyers - and renters - are facing.
“They are like chalk and cheese. In Australia, prices have been rising swiftly, supply (for sale or rent) is low, and affordability constraints are at a record level.
“Whereas in New Zealand prices have now fallen by over 15% from the market peak, listings are high, rents are easing and housing has become more affordable.”
While Australian interest rates are stable, they are more likely to rise than fall - particularly as inflation has rebounded (to 3.8% in October), and that is exacerbating cost challenges, he says.
That led the Sunday Star-Times to compare key components of both housing markets to illustrate what people looking to buy or rent a home on either side of the ditch might find.
House prices
Australia’s national median price was NZ$1.018 million (A$888,941) in November, according to Cotality's Home Value Index.
The median has gone up by at least 1% for the last three months, and is up 7.5% on the same time last year.
In contrast, Cotality’s latest figures put New Zealand’s national median at NZ$806,551 in November.
Not only was the median flat on October, but it was down 0.7% on the same time last year, and is 17.4% below the early 2022 market peak.
There are price differences between, and within, Australia’s various states and territories. But New Zealanders tend to flock to the major urban hubs of Sydney, Melbourne and Brisbane.
In November, Sydney’s median price was NZ$1.455m (A$1.269m), Melbourne’s was NZ$943,725 (A$823,495), and Brisbane’s was NZ$1.164m (A$1.015m.)
Each of these cities have a high amount of apartments and units, which tend to be lower priced than houses, and bring down the overall median. The median for standalone house prices is higher again.
Of the other big state capitals, Adelaide’s median price was NZ$1.021m (A$891,004) and Perth’s was NZ$1.048m (A$914,229).
None of these prices include stamp duty, which is charged on sales in all states, although there are some exemptions for first home buyers.
Of New Zealand’s three biggest cities, Auckland’s median was NZ$1.048m, Wellington’s was NZ$778,148, and Christchurch’s was NZ$705,030.
Affordability constraints
Lawless says that in Australia the pace of price growth is starting to moderate, and housing unaffordability, which is at record highs, is one of the reasons why.
The national median house price is now 8.2 times higher than the annual pre-tax household income, and near record levels of income (45%) are required to service a mortgage at the median price, he says.
“The (federal) government’s incentives for first home buyers - the expansion of the 5% deposit guarantee and ‘Help to Buy’ shared equity program - are a sugar hit for home owners.
“But they don’t do anything for housing affordability. Most economists would acknowledge they further stimulate demand and add upward pressure to prices.”
Pavletich points to the latest Demographia report for examples of Australia’s affordability issues. The report ranks 94 major housing markets, with populations of more than 1 million in Australia, Canada, Hong Kong, Ireland, New Zealand, Singapore, UK and the United States.
Using “median multiples”, which measure median house price divided by gross median household income, it ranks five Australian state capitals among the 20 least affordable cities in the world.
Sydney is second least affordable city in the world with a median multiple of 13.8, while Adelaide (10.9), Melbourne (9.7), and Brisbane (9.3) are also “impossibly unaffordable” with median multiples of over 9.
Perth is “severely unaffordable” with a median multiple of 8.3.
Auckland is the only New Zealand city that features in the Demographia report, and with a median multiple of 7.7 it is still classified as “severely unaffordable”.
But it was an improvement from 2022 when Auckland’s price to income ratio was 11.2, and 2021 when the city was ranked fourth least affordable in the world.
Pavletich says this is a positive development. “There’s cross-party buy-in and broad public support to get this sorted out. I’m enormously heartened by the progress being made towards more affordable housing in this country.”
Rental markets
It’s not just house prices that have soared in Australia. Renters are also being hit by high, and increasing, median rents and a scarcity of rental listings.
Cotality’s latest quarterly rental review puts the country’s median weekly rent at NZ$770 (A$672). Rents rose by 1.4% over the third quarter, and by 4.3% over the year to September.
Again, there is state and regional variation, but rents are higher in the state capital cities. Of the big three, Sydney’s median weekly rent is NZ$925 (A$807), while Melbourne’s is NZ$705 (A$615) and Brisbane’s is NZ$798 (A$696).
Lawless says a recent reacceleration in rental growth relates to a persistent shortage in rental supply, and that’s highlighted by a record-low vacancy rate nationally.
The national vacancy rate was 1.47% in September, which is less than half the pre-Covid decade average of 3.3%, he says.
“And it is like that around the country, not just in Sydney and Melbourne. Strong migration and rising inflation are playing a role, but over the past five years rents have gone up about 45%.
“Everyone acknowledges there is a problem, but there are not many solutions. It really comes back to boosting supply by building more.”
But for now the market is broken, and there is unlikely to be relief for renters any time soon, he says.
Meanwhile, in New Zealand the national average rental asking price on Realestate.co.nz was down 3.1% annually to NZ$626 a week in November, compared to NZ$646 a week at the same time last year.
In the Auckland and Wellington regions, average weekly rents were NZ$679 and NZ$642 respectively, down from NZ$701 and NZ$704 at the same time last year. Canterbury’s rent was NZ$586, down from NZ$596.
Realestate.co.nz chief executive Sarah Wood said a record 7253 new rental listings hit the market in November, and rental stock has increased by 17.4% annually, which “presents clear opportunities for renters”.
Supply & demand
Strong demand is driving the Australian housing market, and migration-related population growth is a major factor in that. But investors are also particularly active, Lawless says.
“Investors currently account for about 41% of home lending, and that lending share is very high, with the group’s long-term average at about 33%. And the situation is amplified by new incentives for first home buyers which are increasing demand.”
At the same time, there are persistently low supply levels across both the established market and newly built housing, he says.
“APRA recently announced a 20% limit on high debt-to-income ratio lending. It’s a light touch but it sends a message that APRA will act if credit growth picks up more.
“If credit was tightened up more it would suppress demand, and that would slow the market and price growth, but it is hard to see prices dropping - given there is such a shortage of supply.”
The response to the situation should be focused on the supply side, but there are challenges there, Lawless says.
“A big one is that housing construction is largely done by the private sector, and it needs projects with feasibility and profitability, and right now that’s stretched, especially in the multi-unit sector.
“That’s due to a run of increasing construction costs, scarcity in the labour market, and competition pressure from big public infrastructure projects which attract funding and labour.”
Eventually, more supply will come through but the low supply levels will take time to fix, he says.
New Zealand’s supply and demand equation is more balanced.
On the demand side, migration and population growth has slowed, and while Reserve Bank figures show mortgage lending has been rising in recent months, borrowers are taking a cautious approach to the market.
First home buyers dominate the market with a record-high 29% share of purchases in October. Investor market share has crept up from record lows to 25.1%, but the debt-to-income ratios now in place are expected to temper excess demand.
On the supply side, there have been unusually high levels of homes on the market for over a year, according to Realestate.co.nz.
The country has also seen a raft of zoning and planning, and building industry reforms introduced at central and local government level over recent years. The goal is to make it easier, and more affordable to build more housing, including higher density housing.
Auckland’s Unitary Plan, in place for 10 years, has led to more intensification of housing development. It has increased housing supply and improved affordability, compared to a scenario where it was never introduced, according to research by Auckland University professor Ryan Greenaway-McGrevy.
Now, it seems Australian lawmakers are looking at Auckland for ideas on how to make housing more affordable.
A recent report from the Committee for the Economic Development of Australia said Australia could ease its housing issues by adopting “gentle density”, and cites Auckland as a model.
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