“The actual amount needed for a deposit might be a little bit less,but we’re in a situation where we have the cost of living running at 7 per cent per annum.”
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Unless someone was a cash buyer,the lift in interest rates meant there had not been an improvement in affordability,she said.
“It’s clearly not median income earners that are buying median-priced homes,and what that goes to show is that people earning regular incomes are to some degree priced out of these expensive markets,” she said.
Emmett said a very substantial fall in property prices would be needed to improve affordability,which she stressed was an unlikely scenario. Her forecast is an 18 per cent peak-to-trough fall in house prices.
The report also compared dwelling values to income,finding only a modest reduction in this ratio.
Nationally,dwelling values are 8.2 times higher than incomes,slightly lower than 8.5 times in the June quarter,but above the decade average of 6.9 times.
By city,Sydney dwellings cost 9.6 times incomes,Melbourne 8 times,Brisbane 7.6 times and Perth 5.8 times.
CoreLogic head of Australian research Eliza Owen said the fall in the deposit hurdle has not offset the cost of mortgage serviceability,and is little help for tenants spending more on rent.
“The median household income level would probably be dissuaded from actually purchasing the median dwelling within their region,” she said. “If you’re a high-income earner you might be quite comfortable servicing a mortgage with 40 or 50 or 60 per cent of your income.
“If you are on a relatively low income then it becomes extremely stressful.”
Owen said this downturn was about containing inflation,not about housing affordability,so it was unlikely prices would fall to levels that improve the metrics in the report.
The research also looked at renting and measured the share of income required to service rent.
This has reached 31.6 per cent nationally and has risen in every capital city except Hobart and Canberra over the past quarter.
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Owen said renting is becoming more challenging as tenants who have to spend more on rent might not be able to save as much.
On the ground,first home buyers are hopeful price falls will help them get into the market,but it is not always the case,Mortgage Broker Sydney principal Michael Brown said.
“Interest rates are going up and changing their borrowing capacity,but the downward movement in prices is not matching that,so they’re falling behind,” he said.
“The price changes aren’t happening as quickly as the interest rate changes are.”
He said more first home buyers were looking to use the federal government’s low-deposit scheme that allows purchases with a 5 per cent deposit without paying lenders’ mortgage insurance.
“The overall vibe of house prices falling means they think they can get somewhere now. Before,it was just an impossibility as prices were spiralling,” he said.