Housing Affordability Slightly Improves
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Housing Affordability Slightly Improves

Despite mortgage serviceability ratios at decade highs in some capital cities.

By Kanebridge News
Wed, Aug 31, 2022 11:43amGrey Clock < 1 min

With the recent decrease in house prices has come the first measurable signs of an improvement in affordability across the property market.

Yet despite the downturn, the pressure on interest rates has kept mortgages — proportionate to incomes — at the highest level they have been since June 2011 according to the latest ANZ/CoreLogic Housing Affordability Report.

The new research found that with property values decreasing, the time it takes to save for a home deposit has also dropped across the combined capital cities by 11 days to 11.11 years in the three months to June 2022.

In Sydney, the time needed to save a deposit was at 17.1 years while Melbourne came in at 13.6 years.

Further, the ratio of dwelling values to household income has also dropped slightly across the combined capitals, down by 0.1 point to 9.3 over the June quarter.

Despite this, the proportion of annual household income required to service a new mortgage nationally is up to 44% from 40.4% the previous quarter.

In Sydney and Melbourne, where property values declined 2.8% and 1.8% respectively, mortgage serviceability is higher with the share of income needed to service a home loan in Sydney up 3.3% to 66.1% and 2.3% to 52.7% in Melbourne.

“There’s a bit of a perception that if house prices fall, then mortgage affordability will improve but actually, on our interest rate forecasts, prices would have to fall another more than 25 per cent for mortgage serviceability to improve, and we don’t think that prices will fall that far, certainly not a national level,” said ANZ senior economist, Felicity Emmett.

“So with higher interest rates, we are seeing a big increase in how much people have to pay to service their mortgage and that means on that measure, affordability will deteriorate”

 



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Scheduled auctions fall to winter levels as vendors hold back on going to market

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Grand final fever and the long weekend have dampened scheduled auction activity this weekend, CoreLogic reports.

The number of homes scheduled for auction this weekend is set to halve, with 1,324 properties listed, marking the quietest week since mid June. Melbourne will experience the quietest week since Easter, CoreLogic data shows, with 223 homes prepared to go under the hammer. In Sydney, 805 properties are expected to go to market, the lowest number in seven weeks.

With long weekends in Queensland and South Australia, numbers are also down in Brisbane (111) and Adelaide (86), less than half the properties available for auction the previous week. It’s a less dramatic drop in Canberra, where 83 homes are scheduled for auction, down -22.4 percent on the previous week. 

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