The average Australian household needs to dedicate nearly twice as much of their income to paying their mortgage than they did five years ago, according to a new report.<\/p>\n
The latest findings from property research firm Cotality come as the Albanese government comes under increasing pressure to find ways to accelerate the supply of new homes<\/a> to ease price pressures.<\/p>\n Sign up: AU Breaking News email<\/a><\/p>\n Servicing a new mortgage eats up 45% of a median household\u2019s pre-tax income, up from 26% in September 2020, the analysis shows.<\/p>\n At the centre of the national housing affordability crisis<\/a> \u2013 Sydney \u2013 the Cotality report showed the average household needs to dedicate 68% of their income to paying an average new mortgage for a house, and 39% of their before-tax pay for a mortgage on a unit.<\/p>\n Share of household income required to service a new mortgage for an average-priced house or unit in capital cities and regions<\/a><\/p>\n Australian home values have climbed by about 50% since the start of the pandemic, Cotality\u2019s head of research, Eliza Owen, said.<\/p>\n \u201cThis surge was fuelled by pandemic-era monetary stimulus and record-low interest rates that supercharged borrowing capacity and demand, even as housing supply lagged well behind household formation,\u201d Owen said.<\/p>\n Soaring demand crashed into supply-side limitations, as builders struggled to cope with building costs and planning bottlenecks.<\/p>\n Over the past five years, the median home price climbed at two-and-a-half times the pace of an average Australian household\u2019s income.<\/p>\n The median, pre-tax household income has lifted by a solid 20% to $104,390 since September 2020, but lagging far behind the 54% jump in the median dwelling value to $860,529.<\/p>\n That has left the national home value-to-income ratio at a record 8.2 in September, according to the report, a substantial worsening from 6.5 in March 2020.<\/p>\n Ratio of national median dwelling price to median household income (higher number means more unaffordable)<\/a><\/p>\n Average weekly rents over the same period have jumped by a nearly identical 53%, showing the squeeze facing Australians trying to save for their first home while struggling with soaring rental costs.<\/p>\n While rental affordability has also deteriorated, it has not been as dramatic, at least in terms of the national average. The average portion of income required to pay rent has climbed to 33%, from 26% five years ago.<\/p>\n The report showed regional Queensland had the most unaffordable rents, with households on average incomes outside Brisbane having to dedicate 39% of their pre-tax pay to lease a home.<\/p>\n skip past newsletter promotion<\/a><\/p>\n Sign up to Breaking News Australia<\/p>\n Get the most important news as it breaks<\/p>\n Privacy Notice: Newsletters may contain information about charities, online ads, and content funded by outside parties. If you do not have an account, we will create a guest account for you on theguardian.com<\/a> to send you this newsletter. You can complete full registration at any time. For more information about how we use your data see our Privacy Policy<\/a>. We use Google reCaptcha to protect our website and the Google Privacy Policy<\/a> and Terms of Service<\/a> apply.<\/p>\n after newsletter promotion<\/p>\n