Property Value-To-Income Ratio Hits Peak
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Property Value-To-Income Ratio Hits Peak

Data from ANZ and CoreLogic shows a record high in the June quarter.

By Terry Christodoulou
Mon, Nov 29, 2021 2:39pmGrey Clock 2 min

The national dwelling value-to-income ratio reached a record high in the June quarter according to a new housing affordability report from ANZ and CoreLogic.

Based on median income data from ANU against property statistics from the research specialist, the report found the national dwelling value-to-income ratio reached a record high of 7.7 in the June quarter above the decade average of 6.3 and up from 6.4 in the September 2020 quarter.

Houses saw a sharper ratio when compared to units, leading to the widest gap on record. For houses, the ratio had risen from 6.7 to 8.1 while units experienced a mor moderate increase from 6.2 to 6.8.

Focusing on capital cities, the dwelling value-to-income ratio was recorded at 8 — the highest reading on record. The combined capital city ratio had trended consistently higher since the September quarter last year.

Across the combined capital cities, the median dwelling value, as at June, was %727,427, a 52.1% premium on the equivalent median value across regional Australia.

Sydney had the highest value-to-income ratio, at 10.1, followed by Melbourne and regional NSW, both at 8.5.

Dwelling values across regional Australia rose by 18.1% between March 2020 to June 2021 — against a lift of 11.2% in combined capital city values.

In regional Australia, the median dwelling value-to-income ratio was 6.8. The ratio for houses went from a record low of 5.7 in September 2020 quarter to a record high of 5.7 in June 2021.

There are further property rises expected against household income in the coming months, as Australian house values rose a further 6.8% in the four months to October.

Between March 2020 and June 2021, CoreLogic data indicted the national median housing values have risen by 12.6%.

In the meantime, ANU income modelling suggested the median household income has fallen relatively flat, with an increase of 0.2%.

Based on households saving 15 per cent of their gross annual income, it would now take the typical household a record high of 10.2 years to save a 20 per cent deposit for an Australian dwelling, as at the end of June.

For houses, that means saving a 20% deposit would require a time frame of 10.8 years vs a nine-year period for units. Elsewhere, across capital cities, the average time frame to save a deposit has lifted to 10.7 years — 11.7 years for houses and 9 years for the median value unit.



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