Australians need more of their income than ever before to pay for rent, mortgage repayments
Australians are being forced to dish out more of their income than ever before to pay their rent and mortgage repayments.
That's the verdict of the new ANZ and CoreLogic Housing Affordability Report, which found someone with the average household income of around $101,000 would have to spend 33 per cent of that to afford the median national rental rate – a record high.
Things are even worse for people wanting to buy property, with more than half (50.6 per cent) of the median household income required to service an average new home loan.
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Australians are being forced to dish out more of their income than ever before to pay for housing. Dion Georgopoulos
Both of those figures exceed the typical measure of housing stress, which is generally applied to those spending more than 30 per cent of income on rent or home loan costs.
The report also found it takes 10.6 years to save up a 20 per cent deposit for an average house, and that property is increasingly being pushed out of reach for people on low and middle incomes.
"Access to home ownership may continue to become more concentrated in high-income, high-wealth households, a pattern that has been evident in the past," it states.
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ANZ and CoreLogic found that even some high-income households have trouble buying property, with a household on $172,000 only able to afford half the homes on the market.
"Even high-income households have seen drastically less access to the housing market, putting pressure on cheaper pockets of the market," the report states.
"Modelling for September 2024 shows only 10 per cent of the housing market would be genuinely affordable (require less than 30 per cent of income to service a loan) for the median income household.
"This is well down on the 40 per cent of Australian homes that were affordable for the median income household in March 2022."
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For people on low incomes, none of the housing market is considered affordable. Joe Armao/The Age
For low-income households, 0 per cent of the housing market is considered affordable.
The report found that, while mortgage costs may ease next year due to expected interest rate cuts (ANZ is pencilling in the first cut in February, and for the official cash rate to reach 3.6 per cent by the end of 2025), there's no guarantee housing affordability will follow suit.
"Historic analysis of cash rate movements and home values suggests the reduction in serviceability on a home loan may be partly offset by higher demand for credit, and the potential for renewed upward pressure on home values," it states.
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