Powered by
MOMENTUM
MEDIA
As housing prices soar to unprecedented levels across Australia, a critical yet often overlooked consequence is emerging – one that experts urge family lawyers to understand to address this growing issue effectively.
In Australia’s increasingly unaffordable housing market, rising property prices are doing more than just stressing household budgets – they are profoundly influencing the very fabric of personal relationships.
Speaking with Lawyers Weekly, Professor Stephen Whelan and Dr Luke Hartigan from the University of Sydney and Sonia Haidamous, a senior associate at SLF Lawyers, revealed that soaring housing costs are becoming a significant factor in couples’ decisions to stay together, even when their relationships are on the brink of breakdown.
The economics of staying together
Drawing on recent research conducted by Whelan and Hartigan, they explained that this trend is closely linked to the escalating cost of housing, with many couples choosing to stay together as a means of financial survival during economically challenging times.
“Rising housing prices might encourage couples to remain married (or not separate) due to the higher housing costs they would face if they separated,” they said.
“It is generally cheaper to run a single household where many resources are shared between the couple rather than two separate households. This may be thought of as a cost that accompanies higher house prices.”
Haidamous has observed this dynamic play out regularly in her practice, noting that rising property prices are now a very real and pressing factor in couples’ decision making.
“For many, the financial reality of separating, particularly the need to fund two separate households in an expensive property market, becomes a practical barrier to leaving a relationship,” she said.
“The costs associated with selling a family home, securing new housing, and potentially moving into rental markets that are also stretched, often mean couples delay or reconsider separation despite emotional or relational difficulties.”
In many long-term relationships – particularly marriages – finances become so deeply intertwined that, as Haidamous explains, disentangling them during separation is rarely straightforward and often daunting.
“Additionally, couples often operate under joint financial structures such as shared mortgages, combined bank accounts and co-signed loans, which are not easily unwound,” she said.
“For many, the prospect of disentangling these arrangements, especially in a high-cost environment where refinancing may not even be possible, adds another layer of complexity to separation discussions.”
As a result, this can lead to what Haidamous described as “financial entrapment”, where an individual remains in a relationship because the “economic consequences of separation feel too severe to make leaving a viable option”.
Structural drivers behind the trend
Most people might assume that rising house prices would lead to more divorces, rather than more couples choosing to stay together.
However, Haidamous explained that the opposite trend is driven by a chronic undersupply of new dwellings, coupled with strong population growth, creating an intensely competitive housing market where prices have reached historic highs.
“Key factors driving this trend include a combination of structural and economic pressures. Limited housing supply, particularly in metropolitan areas, means that both rental and purchase markets are highly competitive, with prices often exceeding what an individual on a single income can afford,” she said.
“Rising mortgage repayments, driven by sustained interest rate increases, have further strained household budgets, making the prospect of servicing a mortgage alone unrealistic for many. At the same time, rental prices are at historic highs, with vacancy rates at record lows.”
As a result of the competitive housing market, Haidamous highlighted that another key factor driving this trend is the increasing difficulty of qualifying for a home loan as a single applicant due to tighter lending criteria.
“Another significant factor is the difficulty of qualifying for a home loan as a single applicant. The lending criteria have tightened, making it harder for individuals to secure financing based solely on one income,” she said.
“People who previously relied on dual incomes to qualify for their current mortgage often find themselves unable to replicate that borrowing power post-separation, forcing them to remain in their existing living arrangements out of necessity.”
Whelan and Hartigan acknowledged that there can be “some financial benefits from couples continuing to stay together”, such as sharing household expenses rather than separately funding two homes.
However, they cautioned that this decision must be “balanced with the negative aspects” of continued cohabitation, noting that couples need to consider that it “might not even be feasible or safe.”
Haidamous also explained that for many couples, staying together under one roof is a form of financial self-preservation, often the only viable option when alternatives are simply unaffordable.
“In essence, for many couples, remaining together, even in a strained or distant relationship, becomes a form of financial self-preservation,” she said.
“The alternative, especially in today’s economic climate, may be viewed as a step into financial hardship or even housing insecurity. In some cases, people are not choosing to stay, they simply cannot afford to leave.”
Guidance for family lawyers
In light of the growing link between rising housing prices and couples remaining together, sometimes despite relationship breakdown, family lawyers are now facing new challenges in guiding clients through separation and divorce.
Haidamous emphasised that one of the key things family lawyers should consider when advising clients is the need to approach matters with heightened sensitivity to the financial pressures many are now facing.
“Family lawyers should approach cases with heightened sensitivity to the financial pressures clients are facing. More than ever, separating couples need clear, practical guidance, not just about their legal rights, but about the financial realities they’ll face once they’re living apart,” she said.
“It’s crucial to help clients realistically assess the costs of separation from the outset, including potential difficulties in securing housing, the affordability of servicing a mortgage on a single income, and the expenses associated with setting up a new household.”
She also advised that family lawyers should place greater emphasis on helping clients develop realistic exit strategies that offer financial breathing room and support a gradual transition out of the relationship.
“Family lawyers should prioritise working with clients to develop an exit strategy, rather than assuming separation is immediately achievable. This may involve discussing short- to medium-term planning, for example, staying in the home under interim arrangements while preparing financially and emotionally for an eventual separation,” she said.
“In some cases, options such as deferred property sales, extended interim spousal maintenance, or structured cohabitation agreements might provide necessary breathing room, allowing clients to disentangle themselves in stages rather than all at once. These kinds of creative, staged solutions may be essential in helping clients avoid financial crises.”
Additionally, she explained the importance of family lawyers being proactive in connecting clients with trusted financial advisers and mortgage brokers, ensuring they are well-informed and equipped to make sound decisions about their future.
“Be proactive in referring clients to trusted financial advisors and mortgage brokers who can help them understand their borrowing capacity, potential cash flow after separation, and realistic housing options,” she said.
“Some clients may also need assistance understanding their financial position within the relationship itself, especially where one partner has historically controlled the finances. In these cases, gathering full disclosure early and carefully educating clients about their financial landscape is a critical first step.”
