Home buyers face the challenge of rising home values despite rising interest rates that would traditionally push home prices lower,the report found,as property prices started to recover from their downturn amid population growth,a lack of homes for sale,tight rental markets and expectations the cash rate may be close to its peak.
The mortgage burden has also risen as interest rates have lifted from their record lows. A typical household would need to spend 46.2 per cent of their income to pay the mortgage on a typical Australian home,assuming they had a 20 per cent deposit,the research found.
Potential buyers can borrow less as interest rates rise,widening the gap between how much houses cost and how much buyers can afford to pay without being in mortgage stress.
The median Australian home value is about $741,000,across cities and including houses and units,even though that figure may look cheap to residents of the largest cities. But the median household wanting to avoid mortgage stress would have a budget at auction of just $479,000.
Meanwhile,rising rents make it harder to save a deposit. Advertised rent values are up 28.4 per cent since the pandemic began,the report found.
“There’s probably more challenges than ever for first home buyers trying to get into the market,” CoreLogic head of Australian research Eliza Owen said.