For thousands of Australians, the relationship is over – but moving out is a luxury they simply can’t afford.
In the middle of a cost-of-living and housing crunch, ex-couples are being forced to keep living together because neither side can afford to sell, buy out the other, or set up a new life alone.
New research has revealed the ugly financial trap behind modern breakups, with nearly one in five separated or divorced Australians still living with their former partner because they can’t afford to sell.
That’s according to the Real Insurance Separation Report 2026, which also found 42 per cent of people who continued living with an ex did so because the cost of living made it too expensive to live separately.
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Queenslanders were the most likely to be stuck under the same roof, with 48.1 per cent saying separated people were remaining in the home together because they couldn’t afford to live apart.
New South Wales followed on 45.4 per cent, then South Australia and the Northern Territory on 44.4 per cent, Victoria and Tasmania on 42.4 per cent, and Western Australia on 17.1 per cent.
Source: Money.com.au
Separate research from Money.com.au also found more than one in four Australians – 27 per cent – have gone through a divorce or separation while jointly owning a home with a partner.
Among them, only 51 per cent said one person was able to keep the property.
Nearly a third, 31 per cent, were forced to sell because neither person could afford to hold onto the family home or buy out the other.
Another 16 per cent sold for other reasons, including downsizing or relocating, while just 2 per cent kept the property as an investment.
Money.com.au mortgage expert Nick Burgess said many Australians don’t realise how quickly a separation can trigger a financial collapse.
“A separation reduces a household’s financial capacity. Going from two incomes supporting
a mortgage on the family home to a single income can quickly create a financial shock that
sets people back years,” he said.
“Many people either don’t have enough borrowing power to buy out their former partner, or they can’t service the mortgage repayments on the family home on their own.”
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Australians are finding divorce so expensive they can’t afford to move out, with many separated couples forced to keep living under the same roof because selling up or starting again is simply out of reach.
For many, that means the family home becomes the biggest casualty of the break-up.
Burgess said couples are often forced to sell and split the equity, only to find both parties are then trying to re-enter a housing market that is even less forgiving to single buyers.
“They’re forced to sell and split the equity, which often leaves both parties with smaller deposits for their next purchase and the challenge of buying back into a market where prices continue to rise and borrowing as a single applicant is significantly harder,” he said.
“In fact, many solo buyers don’t meet bank serviceability requirements at today’s property prices.”
The research found 58 per cent were eventually able to buy another home independently after separating.
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Another 30 per cent re-entered the property market with a new partner or spouse.
More than one in 10 – 12 per cent – said they had not been able to buy another home at all since the relationship ended.
And the strain starts long before the moving boxes come out.
The Real Insurance report found 39 per cent of respondents said financial pressure significantly delayed their decision to separate.
Women were more likely to be affected, with 46 per cent saying money worries held them back. Younger Australians were hit even harder, including 77 per cent of Gen Z and 61 per cent of Gen Y.
Women are more likely to be affected by divorce, with 46 per cent saying financial strain held them back, while younger Australians were hit hardest, including 77 per cent of Gen Z and 61 per cent of Gen Y.
About 40 per cent said they felt financially dependent on their partner before separating, including 54 per cent of women compared with 27 per cent of men.
Then there’s the price tag of the split itself.
Among those who paid legal fees, the average came to $7481.
Hitch principal lawyer Elise Fordham said too many people stay stuck in limbo because they fear what the legal process will cost, only to make things worse by waiting.
“Separation is one of the most financially complex events a person will face, and the decisions made in those early weeks can have consequences that last decades. Early legal advice isn’t a luxury; it’s a safeguard,” she said.
“We see it constantly; people stay in limbo, hoping things will resolve themselves, often because they’re afraid of what the legal process will cost or reveal. But delay rarely protects you financially. More often it compounds the problem.”
Fordham said women were often hardest hit because they were more likely to have sacrificed their own earning power during the relationship.
“For women who have stepped back from their careers to raise children or support a partner’s professional life, separation can be a financial free fall,” she said.
“Overnight, they can lose access to income, joint accounts, and the family home – often with no independent financial footing to fall back on.”
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