Australia’s property boom has pushed home values up by 38% in five years, reshaping household finances. Now, new research suggests it may also be quietly influencing marriages by keeping some couples from separating.
Rising costs have long been associated with financial strain, but this link between housing and relationships offers a new dimension to the nation’s cost-of-living crisis. As researchers examine the social consequences of property market pressures, the findings could hold significant implications for family policy and support services.
Housing Prices and the Hidden Cost of Separation
According to Stephen Whelan, Associate Professor of Economics at the University of Sydney, divorce rates in Australia have fallen to their lowest level since the introduction of no-fault divorce in 1976. Despite economic pressures, couples appear to be staying together – but not necessarily for reasons of marital harmony.
“Divorce is a decision that comes with substantial costs,” Whelan explained. For many households, the financial implications of running two separate homes rather than sharing one are simply prohibitive. This is particularly relevant in cities where property values and rental costs are at record highs.
Whelan and co-author Luke Hartigan presented research at the Australian Conference of Economists showing that unexpected increases in housing prices – referred to as “price shocks” – significantly reduce the likelihood of separation among homeowners. This effect is most pronounced for low-income households, older couples, and women with lower education levels, who face the steepest financial barriers to leaving a marriage.
When Property Prices Fall, Separation Rises
The study also found that the reverse is true. According to the research, when housing prices rise more slowly than anticipated, the likelihood of separation increases. Lower-than-expected price growth appears to reduce the financial penalty of maintaining two separate households, making separation more feasible for some couples.
The analysis, based on data from the Household, Income and Labour Dynamics in Australia (HILDA) survey, also highlighted other factors affecting marital stability. Couples with shared characteristics such as similar education levels, religion or cultural background were more likely to remain together, while those whose parents had divorced faced a greater risk of separation.
This link between property values and personal relationships underscores how deeply the housing market permeates social life. Policy measures such as the New South Wales government’s Leaving Violence Program – which provides financial support to individuals leaving unsafe relationships – demonstrate how targeted assistance can help mitigate these pressures.
