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New research has revealed housing affordability worsened in all but one capital city over 12 months.
According to Moody’s Investors Service, housing affordability deteriorated in all Australian capital cities except for Perth during the 12 months to 31 March 2016.
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“During the 12 months to 31 March 2016, Australian households spent an average of 27.6 per cent of their monthly income on mortgage repayments, up from 27.0 per cent for the 12 months to 31 March 2015,” Moody’s analyst Natsumi Matsuda said.
Sydney continues to be the most unaffordable capital city for home buyers, with the average household required to spend 35.6 per cent of its monthly income on mortgage repayments.
This is followed by Melbourne, where the average household spends 30 per cent of its monthly income on mortgage repayments, compared with 27.2 per cent a year prior.
Moderate price increases combined with income declines have also added to affordability pressures in Adelaide, forcing the average household to spend 23.2 per cent of its monthly income on mortgage repayments, up from 21.9 per cent a year prior.
Housing affordability also worsened in Brisbane over the 12-month period, with the average household required to spend 24.3 per cent of its monthly income on mortgage repayments, up from 23.6 per cent the previous year.
Oppositely, housing affordability improved in Perth over the period, down to 21.5 per cent from 22.6 per cent the year prior.
Despite the 12-month result, Moody’s said that nationally, affordability remains better than the average for the past 12 years.
However, home owners in Sydney are paying 1.7 percentage points more of their monthly incomes towards their mortgages than the average over the past 12 years, the group noted.
[Related: Rate reductions continue among lenders]
