A recent report from ANZ and CoreLogic highlights the escalating financial burden Australians face regarding housing costs. On average, households earning around $101,000 are now dedicating an unprecedented 33% of their income to rent, marking a record high. The situation is even more dire for prospective homebuyers, who must allocate over half (50.6%) of their median income to service a typical new mortgage.
This report indicates that spending more than 30% of income on housing points to affordability stress, reflecting a broader trend of low to middle-income earners being increasingly priced out of the market. It now takes approximately 10.6 years to save for a 20% deposit on an average home, leading to concerns that homeownership will become increasingly concentrated among high-wealth households.
Even for high-income earners, finding affordable housing is becoming a challenge; a household with an income of $172,000 can only afford half of the properties available. Projections for September 2024 suggest that only 10% of homes will be genuinely affordable for the average income household, a significant drop from 40% in March 2022. While interest rate cuts may provide some relief, they may not curb the overall increase in housing prices, underscoring a complex and concerning outlook for Australian housing affordability.