That is the highest level since June 2011 and up from 40.4 per cent in the previous quarter.
It’s not much better for the nation’s renters,as affordability worsened for the typical tenant,who spent 30.9 per cent of their income on rent in the June quarter,up from 30.3 per cent in the previous quarter.
Renting was even less affordable in regional Australia as tenants spent 34 per cent of their income on a new lease compared with 28.4 per cent spent by city renters.
Home values are still high compared to incomes,albeit starting to fall. Across the capital cities,the median home value is 8.3 times the median household income,edging down from a record 8.4 times in the previous quarter.
House price falls of greater than 25 per cent would be needed to come close to seeing a broad improvement in many of these housing affordability measures,an unlikely scenario,according to Felicity Emmett,ANZ senior economist.
“Even though we might see some marginal improvement in some of these measures,the underlying problems around housing affordability aren’t going to be fixed by a correction of 15 per cent or so in national house prices,not from a perspective of mortgage serviceability,” Emmett said.
“You’d need a decline of more than 25 per cent to offset the higher interest rates impact on mortgage serviceability.”
But homeowners with strong savings and high household incomes looking to buy homes in lifestyle and coastal regions may be the biggest beneficiaries of the downturn,as years are already shaved off the deposit hurdle in some of the most affluent pockets of Sydney and Melbourne.
For example,in Sydney,it would now take 2.5 years less to save for a deposit in the statistical regions of Manly and Pittwater as home values dropped $264,013 and $204,484 respectively in the June quarter.
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In Melbourne,it now takes 1.6 years less to save for a deposit in the Darebin South statistical region,1.1 years less in Bayside and 0.9 years less in Boroondara.
Emmett said the 15 per cent fall forecast might be a marked improvement in the deposit hurdle for some.
“Some of the lifestyle coastal regions,we’re seeing quite significant improvement in the deposit hurdle,” she said.
“But when we’re looking at the measures together,we’re not likely to see a material improvement in housing affordability,even with a decline in house prices.”
CoreLogic’s head of Australian research,Eliza Owen,said while there was a trade-off between falling property prices and rising interest rates,some home hunters on the cusp of buying could benefit.
“There is a trade-off in the places where the deposit hurdle has come down in the face of higher mortgage costs and higher rents. If you had a 20 per cent saving levels before prices started to decline it might mean you have more of a deposit,” Owen said.
“The real trap is for low-income renters where they are facing higher rents,and it makes it especially hard for them to save for deposit.”
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She said affordability for first-home buyers may improve as the downswing continues,but that depends on households’ savings and incomes.
Owen said the rapidly shrinking affordability gap between regional and capital cities means households chasing affordable housing may have run out of time.
“It takes just five months less for regional Australians to get their deposit together. The benefits of moving to the regions in terms of affordability has likely been eroded in the past couple of years.”