Australia's housing affordability report highlights worsening conditions, with median household income rising 2.8% in the past year, while dwelling values grew 8.5% and rents surged 9.6%. By September 2024, only 10% of the housing market will be affordable for median-income households, compared to 40% in March 2022. High-income earners also face limited options, intensifying pressure on cheaper housing segments. Additionally, the national median rental rate has reached a record 33% of median household income, exacerbating affordability challenges.
The annual housing affordability report by ANZ Banking Group and CoreLogic revealed that in September, the national median dwelling value was eight times the median annual household income, matching the record high set in early 2022. The report also highlighted that a median-income household now needs 10.6 years to save a 20% deposit for a median-priced home.
With a 20% deposit, a 25-year loan term, and current average mortgage rates, servicing a new home loan now requires 50.6% of the median household income, a record high compared to 30.6% in September 2019 and the 20-year average of 36.6%. The report shows that Australia's median household income grew by 2.8% over the year to September, while the median dwelling value rose by 8.5% and rents increased by 9.6% during the same period.
Modeling for September 2024 indicates that only 10% of the housing market would be affordable-requiring less than 30% of income to service a loan-for a median-income household, down from 40% in March 2022. The report also noted that even high-income households face significantly reduced housing access, increasing demand in lower-cost market segments. Additionally, the national median rental rate reached a record 33% of median household income in September.
The ANZ Banking Group is one of Australia's largest financial institutions, offering banking and financial services, including housing loans and market analysis. CoreLogic is a leading property data and analytics provider, specializing in real estate market trends and valuations. Together, ANZ and CoreLogic collaborate on housing affordability reports, leveraging ANZ's financial insights and CoreLogic's extensive property data to analyze market trends and assess housing accessibility for Australian households. Their partnership provides critical information for policymakers, investors, and the public.
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