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Housing affordability back on the decline
Housing affordability has now peaked, according to research that also indicated property prices are set to reach new record highs in the first half of 2020.
Housing affordability back on the decline
Housing affordability has now peaked, according to research that also indicated property prices are set to reach new record highs in the first half of 2020.
ANZ and CoreLogic have reported that June’s national dwelling value “trough” meant house values were just 6.5 times higher than gross annual household incomes – the lowest level they have sat at since December 2013.
But the low level was only a short reprieve for property purchasers, with ANZ’s senior economist, Felicity Emmett, indicating that “June 2019 marked a turning point as dwelling values again began to outpace household incomes across capital cities, with the exception of Perth and Darwin”.
She said the price rebound is being driven by a number of factors, including record-low interest rates, easier credit access and more certainty around tax arrangements.
While Corelogic’s head of research, Tim Lawless, previously considered that a number of markets are on track to post a recovery, he noted that there’s now “more urgency coming back into the market”.
“However, there is still some good news for prospective buyers and renters,” he offered.
“The research shows households are now dedicating the smallest proportion of their incomes towards paying a new mortgage since early 2004, and renters are spending the lowest proportion of their income on accommodation since 2007.”
He added that this year has also seen “an increase in the number of areas where it is cheaper to buy than rent, which can be attributed to the lowest interest rates since the 1950s, together with lower housing prices relative to the market peak”.
It comes after ME released its own report that showed improved sentiment around the housing market.
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