The PropTrack Housing Affordability Report highlights a severe affordability crisis in Australia in 2024.
Rapid home price increases and the highest interest rates in a decade have led to the worst housing affordability since records began in 1994-95.
Households can now afford the smallest share of homes, a significant decline since the pandemic and worse than last year.
While affordability improved post-Global Financial Crisis and was favourable in 2020-2021, the historic rise in interest rates since mid-2022 has drastically worsened the situation, making homeownership more difficult than ever.
Housing Affordability Worst in NSW, Tasmania and Victoria
New South Wales, Tasmania, and Victoria face the toughest housing affordability challenges.
In Sydney, with a median house price of $1.5 million, median-income households can afford just 10% of homes.
In Victoria, median-income households can afford only 12% of homes sold, while Tasmanian households can afford fewer than 10%.
Conversely, Western Australia is the most affordable, attracting buyers and driving rapid price growth.
How long does it take to save a deposit?
Even first-home buyers who can afford mortgage repayments struggle to save for a deposit while paying rent.
An average-income household would need to save 20% of their income for over five and a half years to accumulate a 20% deposit on a median-priced home.
Housing Affordability Crisis Hits Record Low - but will it get better?
Whilst the housing affordability crisis hit a record low, Lower interest rates may ease housing affordability soon, but meaningful long-term change requires increasing housing supply.
The National Cabinet's target of building 1.2 million well-located homes is a landmark housing policy, prompting ambitious zoning reforms from several state governments. While these reforms have proven effective internationally, meeting this goal will require a coordinated national effort to boost construction.
If you would like to know more about how we can help you build a property portfolio give us a call on 0423 344 286 or email us at hello@mindsetproperty.com.au, or simply connect with our Director Peter Theodorou.
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Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
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