As Australians look ahead, housing has firmly established itself as the biggest financial concern. Whether renting or owning, the cost of housing now shapes household budgets more than any other expense. Despite multiple interest rate cuts during 2025, financial pressure remains. Earlier rate rises and ongoing price increases created stress that has not fully eased.

Renters have felt this most acutely. A large proportion experienced rent increases during the year, often at levels that forced changes to spending habits. Many reduced discretionary spending or actively searched for more affordable housing. Some were pushed to move further from work, downsize, or remain in shared accommodation longer than planned. These were not lifestyle choices. They were financial decisions.

Property owners also felt pressure. While many benefited from capital growth, higher repayments over recent years strained cash flow. A noticeable share of owners are now considering selling, with affordability a key driver. Downsizing has become a common theme, particularly among older owners. The motivation is often financial flexibility rather than lifestyle alone. Releasing equity and reducing ongoing costs are front of mind.

Housing costs now influence confidence across the economy. When housing feels expensive or uncertain, people delay other financial decisions. Renovations, travel and major purchases are often put on hold. This matters because financial stress shapes behaviour. It influences when people buy, sell, rent or stay put.

Looking forward, housing affordability will remain a dominant issue. Without meaningful increases in supply, pressure on both rents and prices is unlikely to ease quickly. For households, informed decisions are critical. Housing is not just an asset or an expense. It is the foundation of financial security for most Australians.