Just 2.1 divorces per 1000 adults were granted in Australia in 2024.

That’s lower than during the recession of the 1990s, when financial strain pushed marriages to the brink.

Australia’s divorce rate is at its lowest level since no-fault divorce laws were introduced in 1976, when we counted more than six divorces per 1000 adults.

Why are we seeing so few divorces? We’ve de-stigmatised divorce, shouldn’t we see more divorces?

This counterintuitive trend has an easy explanation. We see fewer divorces as there are fewer marriages – so far so simple. There is, however, an unexpected property angle to the story.

New research suggests another sobering explanation – high housing costs are locking couples into relationships they might otherwise leave. It’s not that Australians are happier. It’s that separation has become unaffordable.

Consider the mathematics. A couple servicing an average mortgage of $750,000 almost certainly relies on two incomes to meet repayments.

In a separation, one household turns into two households. Both partners keep their job but somehow must find money to support an additional household. For many, the sums simply don’t work.

Add children, and the mathematics become impossible since both households must be large enough to host children at least for a weekend.

Separating from your partner has several property solutions: You sell the family home, regardless of it being a buyer’s or a seller’s market, and establish two new households. Maybe one parent remains in the family home while the other moves out.

In such a case, the local neighbourhood might be too expensive or doesn’t offer relevant small rental accommodation. The leaving parent then must move further away from their kids.

Maybe both parties move into rental accommodation and thereby limit the wealth accumulation ability of the (former) family unit. Any divorcee adds additional pressure to an already very tight rental market.

Since everyone in Australia is aware of how unattractive the rental market is at the moment, might it be the case that couples stay together that would’ve split otherwise? How many relationships persist not because they’re functional, but because the housing market makes leaving economically unviable?

The renter-homeowner divide

Divorce reshapes the property market in different ways depending on tenure. Homeowners, despite the anguish of separation, at least have an asset to divide.

The property sale, however painful or potentially loss-making, provides liquidity for a reset. If arrangements can be made, only one former partner needs to venture out into the rental market while the other remains in the house.

Renters face a different nightmare. Post-separation renters experience acute housing insecurity.

Lease agreements can be terminated, but securing new rental accommodation as a sole parent on a single income is increasingly difficult. Many face being priced out of their neighbourhood entirely.

Post-separation renters experience acute housing insecurity. Photo: Getty

Kids then might be forced to change schools, adding an additional disruption to an already difficult situation.

The flipside is that a rental contract dissolves faster than a home sale, but this is cold comfort when viable new rental options are scarce.

For property investors and developers, this creates an overlooked cohort – separated single parents requiring affordable rental accommodation in established suburbs.

The cost of living alone

High housing costs don’t just affect people in failing relationships. They reshape decisions for those not yet partnered.

Living alone is economically irrational. You need one fridge, one washing machine, one internet connection, one Netflix subscription, one coffee machine, one vacuum cleaner per household.

Living with a partner (or housemate of some other sort) means you save 50 per cent on these costs on top of cheaper per capita rental or mortgage costs. In a cost-of-living crisis, such considerations weigh heavier than ever.

Demographically and socially, the trend towards more single-person households isn’t a surprise. It’s the logical consequence of a prolonged education, delayed marriage and first childbirth pushed into the mid-30s.

Now this cultural trend collides with economics in the most painful way. Young people facing housing costs that absorb half their income are forced to either partner up, move back with parents, or enter shared living arrangements.

The property market, not love, is driving household formation decisions and even romantic decisions.

Gender, property and economic power

There’s a gendered dimension to this affordability trap that deserves examination.

Women in their 40s and 50s earn less on average than their male partners, while disproportionately taking on caregiving responsibilities.

These women will find it harder to leave financially dependent relationships. A woman earning $60,000 annually can’t be expected to service a mortgage or secure decent rental accommodation.

Landlords are likely to pick a dual-income couple over a single low-income earner mother.

Leaving an unhappy relationship almost certainly means downward economic mobility and increased housing insecurity.

Housing insecurity disproportionately affects those with less economic power.

For now, the lower-income earner in most couples remains the woman. This trend might change eventually, considering that women outperform men on all levels of education and that e61 Institute research showed young women out-earn their male counterparts on an hourly basis.

For now, housing affordability is locking women in particular into relationships they might otherwise leave.

This is a human rights issue masquerading as a property story.

What this means for the housing market

Lower divorce rates seem positive on the surface. Fewer separations means fewer property sales in the change-of-life phase. But the stability is illusory.

Couples remaining together for financial reasons rather than emotional connection creates psychological stress, potential for domestic conflict (including domestic violence), and eventual breakdown – often only in later years when both partners are older and the kids have finally moved out.

When these relationships finally rupture, the property settlement involves older, lower-income earners with reduced earning capacity and decades remaining in retirement. The forced property sale in one’s 60s or 70s is a different phenomenon than separation in one’s 40s.

The policy imperative

For policymakers, this research carries an uncomfortable message – housing policy is family policy, it’s relationship policy, it’s economic autonomy policy.

Unaffordable housing doesn’t just lock young people out of homeownership, it locks couples into relationships based on financial necessity rather than choice. It locks sole parents into housing insecurity. It locks young people out of independent living. It locks women into dependent relationships.

More affordable housing options would give people genuine autonomy to make relationship and living choices based on their wellbeing rather than their bank balance.

Governments that genuinely improve housing affordability and broaden housing choice would do much more than help Australians buy a home.

A greater supply of townhouses, apartments, build-to-rent projects, downsizer housing and smaller dwellings in established suburbs would give people the freedom to build households that actually suit their stage of life.

Divorcees could remain close to their children. Sole parents could stay connected to existing school and support networks. Young adults could move out without sacrificing half their income. Older Australians could right-size without leaving their communities.

More affordable and diverse housing would strengthen labour mobility, improve mental wellbeing, reduce financial stress and give Australians something increasingly scarce – the ability to make major life decisions based on preference rather than economic necessity.

Housing policy isn’t just about bricks and mortar, it’s about creating a country where people have the freedom to live the lives they actually want.

Simon Kuestenmacher is a co-founder of The Demographics Group. His columns, media commentary and public speaking focus on current socio-demographic trends and how these impact Australia. His podcast, Demographics Decoded, explores the world through the demographic lens. Follow Simon on Twitter (X), Facebook, or LinkedIn.