Affordability has been a mixed bag for both rental and sales markets in major cities and regional markets for the past year or so.
The latest study by the National Housing Finance and Investment Corporation (NHFIC) highlighted the deterioration of affordability, especially for the rental market, which remains the most inaccessible for low-income people in the cities. major cities and regions.
In fact, those with the lowest incomes can only afford to rent 10% or less of the properties in Australia.
Interestingly, the two largest cities – Sydney and Melbourne – have seen modest improvement in rental affordability over the past year.
The impact of border closures which has resulted in lower net migration has offset tight supply as vacancy rates decline.
"For example, Sydney renters in the second income quintile can now afford 10% of properties, up from less than 10% in June 2020," the report says.
The opposite was true in other large cities and regional areas, where deteriorating rent affordability was more common.
For example, despite modest increases in accessibility in Sydney and Melbourne, the NSW and Victoria regions deteriorated.
"Renters in the third income quintile in the NSW and Victoria region can afford 30% of rental properties, up from 50% in June 2020," the report says.
The most unaffordable rents, according to the report, were in Hobart, with tenants in the lower income brackets only being able to afford 10% or less of the rental properties on the market.
Perth has also seen a substantial deterioration in affordability of rents – low-income people can now only afford less than 10% of properties, up from 25% previously.
Affordability Deteriorates for First-Time Home Buyers
The report also highlighted how the pandemic has made conditions difficult for many potential buyers looking to enter the housing market.
In fact, affordability among first-time homebuyers in most low income brackets deteriorated over the year due to strong growth in housing prices.
Yet affordability has remained relative and dependent on geographic locations.
In Perth, for example, potential first-time buyers have had much more favorable buying opportunities.
Low income people in Perth can afford about a third of the properties on the market.
But the situation in Perth is far from being in Hobart, where affordability has deteriorated the most. Four in five first-time homebuyers in Hobart can only afford 10% or less of the properties.
Regional first-time homebuyers were subjected to different scenarios depending on location, with affordability improving in parts of South Australia, Queensland and Queensland Western Australia while deteriorating considerably in New South Wales, Victoria and Tasmania.
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Photo by Micheile on Unsplash.
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