Housing affordability is at its best in a decade due to the coronavirus recession.
A double-income Australian couple earning $ 1,305 a week after taxes had to use 23 percent of their monthly income to pay off a mortgage in September, compared with 25.1 percent the previous year, according to an analysis by rating agency Moody’s.
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This was also well below the decade average of 26.4 percent and covered the previous consequences of the global financial crisis.
Housing affordability (Adelaide house pictured) is at its best in ten years due to the coronavirus recession. In September, a double-income Australian couple earning $ 1,305 a week after tax had to use 23 percent of their monthly income to pay off a mortgage, up from 25.1 percent the previous year, according to an analysis by rating agency Moody’s
Buying a house or apartment has become easier in every state capital over the past year and should only improve with a record low of 0.25 percent.
SYDNEY: 29.9 percent after 30.9 percent in the previous year
MELBOURNE: 24.6 percent after 27 percent in the previous year
BRISBANE: 18.7 percent after 21 percent in the previous year
ADELAIDE: 19 percent after 19.8 percent in the previous year
PERTH: 15 percent after 17.4 percent in the previous year
Source: Moody’s Investors Service data for September 2020 on how much of their two-income couples to spend on servicing a mortgage. Moody’s had no data for Canberra, Hobart, or Darwin
“The affordability of Australian residential real estate, which improved over the year through September, will continue to improve slightly over the next 12 months due to lower mortgage rates and lower house prices,” Moody’s said.
“In a decade in September, housing was the cheapest or almost the most affordable for all capital cities.”
Couples can now typically repay a mortgage on less than a fifth of their income in Brisbane, Adelaide and Perth.
Melbourne home loans can be serviced with less than a quarter of the take-away pay, but Sydney remains challenging as mortgages still consume nearly a third of the salary.
Australia’s largest cities are still among the least affordable in the world when income is compared to house prices.
Before the coronavirus pandemic, Sydney and Melbourne were just behind Hong Kong and Vancouver in the list of the most expensive real estate markets by American think tank Demographia in January 2020.
Adelaide, Brisbane and Perth were considered to be one of the 20 least affordable housing markets in the world, ahead of New York and Singapore.
Sydney
Sydney remains Australia’s most expensive property market, but average home prices have fallen below $ 983,262 for five consecutive months According to CoreLogic data, the psychological mark was at $ 1 million for two straight months.
Couples, who typically earn $ 1,330 a week, spent 29.9 percent of their income on repaying a new home loan, up from 30.9 percent last year and below the decade average of 32.7 percent.
Sydney remains Australia’s most expensive property market. Mortgage repayments are typically 29.9 percent of double income. Pictured is a Toongabbie home in the market for $ 850,000
Melbourne was Australia’s hardest hit property market. Paying back a mortgage now costs 24.6 percent of income. Shown is a home for sale in Altona starting at $ 870,000
Melbourne
Melbourne was Australia’s hardest hit property market during the COVID-19 pandemic. Center house prices fell to $ 780,836 for the sixth straight month in September.
A working couple with an average total weekly income of $ 1,296 last month had to spend 24.6 percent of their income on servicing their mortgage, a large decrease from 27 percent last year and below the 10-year average of 27.8 percent.
Perth
Perth has cemented its place as the cheapest state capital to buy a home with a median home price of $ 463,634.
A married couple, who typically earn a higher average weekly income of $ 1,409 from mining jobs, only had to spend 15 percent of their wages on a mortgage.
Perth has cemented its place as the cheapest state capital to buy a home with, with repayments accounting for just 15 percent of income. A house is pictured on the market in Innaloo
This was the best affordability in ten years, down 17.4 percent last year.
Brisbane
Brisbane, Australia’s third largest city, also has the best affordability in a decade.
With an average home price of $ 559,646, a couple who typically earn $ 1,256 a week had to set aside 18.7 percent of their income to repay a home loan, compared to 21 percent the previous year.
Prices in Brisbane have remained stable mainly during the coronavirus crisis.
Adelaide
Adelaide is Australia’s third most expensive city for borrowers in a city of over a million people.
A couple with a combined weekly income of $ 1,152 had to spend 19 percent of their salary on a mortgage, compared to 19.8 percent last year and below the 10-year average of 21.6 percent.
Brisbane, Australia’s third largest city, also offers the best affordability in ten years. The repayments make up 18.7 percent of income. Pictured is a Stafford home that sells for $ 500,000
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