11/26/2021 | Press release | Distributed by Public on 11/25/2021 02:26
Based on households saving 15 per cent of their gross annual income, it would take a typical household that does not yet own a home a record 10.8 years to save for a house deposit and nine years for a unit.
The report uses multiple metrics to gauge the state of housing affordability across Australia, as property prices jumped 21.6 per cent over the 12 months to October 2021.
Senior ANZ Economist Felicity Emmett said while indicators of home values relative to income and the deposit hurdle have increased most substantially, serviceability of mortgages has been less impacted due to low borrowing rates.
"The number of loans taken out by first home buyers fell 27 per cent between January and September 2021 as housing values increased at a much faster pace than household incomes," she said.
Inner city apartments present some of the best opportunities for both tenants and buyers while regional Australia has become less affordable as the pandemic and more flexible working arrangements increased migration to the regions.
Regional property values increased at a much higher rate than capital cities, jumping 18.1 per cent between March 2020 and June 2021, compared to 11.2 per cent for combined capital cities.
Renting in regional Australia is the least affordable on record, as the portion of income required to pay rent hit a record high of 32.7 per cent in June 2021, compared to 28.2 per cent for capital cities. As a result, there are a growing number of regions in every state where it is cheaper to service a mortgage than rent.
"As borders reopen and workers return to the city, we can expect to see some of these regional affordability constraints start to ease," Ms Emmett said.
"However many challenges will remain, especially for those looking to enter the market, with significantly higher deposits, a tightening of lending restrictions, and higher mortgage rates all features of the 2022 housing market."
Report highlights:
Download a copy of the full report here.
Download a list of locations where it is cheaper to buy versus rent.