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New data has quantified how first-time buyers are facing a raft of challenges as the cost of owning a home rises.
A toxic combination of housing supply-side shortages, cost-of-living pressures, high interest rates, and low savings has dragged house affordability to near record lows, according to CoreLogic, soon to be rebranded as Cotality.
The property analytics company has said that the cost of owning or renting a home has also risen, placing “immense pressure” on many Australians, particularly first home buyers and renters.
CoreLogic produces four measures of housing affordability, each of which was either equal to or at record levels for unaffordability at the end of 2024.
The ratio of dwelling values to household incomes reached a record high in December 2024 at 8.0 (where a household on the median income would be spending eight times their annual gross income to purchase the median value dwelling).
Similarly, based on serviceability metrics for a new mortgage, the median income household would require more than 30 per cent of their gross income for mortgage repayments on the median dwelling value since 2002.
It also takes a record 10.6 number of years to save for a 20 per cent deposit, CoreLogic said.
CoreLogic research director Tim Lawless said housing has rightly emerged as a “pivotal issue” in the upcoming federal election, with housing policies taking centre stage in the political debate.
“Housing affordability challenges have been with us for a long time and most economists agree that policies announced in the lead up to the election are more focused on applying a Band-Aid to the symptoms of housing affordability rather than addressing the underlying issues that have created such an unaffordable housing sector: a long running under-supply of appropriate housing relative to demand," Lawless said.
Housing supply and affordability have featured heavily in the run-up to the election, with the Labor Party, the Coalition, and the Greens all rolling out initiatives to quell concerns over the housing crisis.
Sydney struggles with soaring house prices
The most unaffordable electorates to buy a home in December were mostly located in Sydney, with four of the top five and 12 of the top 20 most unaffordable electorates there, according to CoreLogic.
The list was topped by the electorate of Bradfield, which includes the North Sydney and Hornsby region. Mackellar, Banks, Fowler, Watson, and Grayndler in Sydney also featured in the top 10 least affordable electorates.
In contrast, the most affordable electorates to buy a home were concentrated in regional Queensland, comprising six of the 20 most affordable electorates nationally, followed by Melbourne (four) and regional NSW (three).
The sole federal electorate in Darwin, Solomon, is the most affordable electorate to buy a home nationally.
Amongst the capitals, the electorate of Melbourne stands out as the most affordable to buy, with the lowest dwelling value-to-income ratio at just 4.7.
Lawless said that the Sydney housing market was among the least affordable.
“Geographically, Sydney stands out with the most severe levels of housing unaffordability, apart from rental affordability, where Adelaide is the most stretched. At the other end of the spectrum is Darwin, where a more balanced level of demand and supply has kept housing relatively affordable,” he said.
[Related: Building commencements remain at decade lows]
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