Why rising property prices aren’t a win for Homeowners

There’s a popular belief in Australia that rising house prices automatically make homeowners wealthier. Politicians repeat it, homeowners repeat it, and every second headline seems to celebrate another suburb “tipping over” a new price benchmark. But talk to people actually living through it — families in the Sutherland Shire, first-time buyers in southern Sydney, even long-time owners — and a very different story comes through. The so-called windfall often traps people rather than freeing them.

Owning a home that’s doubled in value isn’t the same thing as becoming wealthier. It’s a strange kind of paper prosperity: flattering to look at, but almost impossible to use unless you’re prepared to take on even more debt. I often hear homeowners say that even if they wanted to sell up and buy something slightly nicer, it would put them under more financial pressure than they’re in now. Their home might be “worth” more, but the homes above them in the ladder have moved by just as much — sometimes more. It’s a treadmill painted to look like an escalator.

Consider what’s been happening across the Sutherland Shire. Median prices for standard family homes have pushed well past $1.5 million in suburbs like Sutherland, Gymea, Caringbah, Kirrawee and Miranda. That rise looks impressive on a graph, but if you’re a couple living in a modest three-bedroom house and dreaming about a bit more space, the leap isn’t getting smaller. The gap between your current home and your aspirational home tends to widen, not shrink. The moment you sell one rising asset, you have to buy an even more expensive rising asset. Any equity you unlock turns instantly into a larger mortgage.

These shifts have collided with an economic landscape that’s become noticeably harsher over the past two years. Interest rates have climbed, the cost of living bites into every budget, and wages aren’t keeping pace with the growth in housing values. A homeowner looking to upgrade today isn’t trading a $600,000 mortgage for an $800,000 one — they’re often looking at something closer to a million dollars or more. Even households on comfortable incomes feel the strain when repayments swell by thousands a month. The supposed financial advantage of owning a home in a booming market disappears the moment you try to move within it.

That’s why rising property prices, far from creating freedom, can box people in. Selling and upgrading becomes a riskier proposition. Staying put means shelving long-term plans. Borrowing against the home adds pressure at a time when many families already feel stretched. The dream of climbing the property ladder, once seen as almost automatic in places like the Shire, is now punctured by the reality of how debt-heavy that climb has become.

The irony is that the only people who truly benefit from rising prices are those who don’t need to buy back in — downsizers, long-term investors, and retirees leaving the market altogether. But for ordinary families trying to grow, or younger homeowners hoping to take a modest step up, the system rewards them with little more than a bigger loan and fewer choices. This isn’t an argument against home ownership, nor is it a lament about affordability alone. It’s simply an honest acknowledgment that rising prices do not produce equal winners. In areas like the Sutherland Shire, they can actually deepen the divide between those who can move and those who are stuck where they are.

We’ve long been told that property is the safest path to wealth. But the truth — uncomfortable as it is — is that property only works in your favour if you can afford to keep playing the game. When every rung of the ladder rises at once, the people in the middle aren’t lifted; they’re stranded. And for many everyday homeowners in southern Sydney, that’s exactly what rising prices have done.