Housing affordability has deteriorated so much in pockets of regional Australia, that some locals would need to devote almost three quarters of their income to mortgage repayments just to get onto the property ladder.
Nationally, the ratio of housing values to household incomes reached a new record high in June, according to data in the latest ANZ CoreLogic Housing Affordability Report.
The findings reveal just how dire the dwelling dilemma is, as the number of years it takes to save a deposit, and the portion of income required to pay rent also hitting worrying highs.
The only metric that didn’t prove concerning was the portion of income required to service an existing mortgage, thanks to record low interest rates.
“Affordability challenges in regional Australia have been exacerbated by Covid-19, where normalised remote work trends and appealing coastal or tree change settings became ‘pull’ factors of demand,” Eliza Owen, head of research Australia at CoreLogic explains.
“Meanwhile, high capital city property prices, and the higher incidence of strict social distancing restrictions, became ‘push’ factors, driving people away from major cities.”
In the year to March 2021, the escape to the country increased by 5.9 per cent, while the number of people actually leaving regional Australia for the capital cities fell by 3.5 per cent in the same period.
Ms Owen said the combination of more people arriving in regional Australia – and fewer people leaving for the cities – had created a surge in housing demand that resulted in slim pickings for buyers and renters.
The data showed that as of November 28, the amount of homes for sale across regional Australia remained a whopping -36.9 per cent below the five-year average, with just under 60,000 properties available to buy.
After crunching the numbers on 130 regional sub markets, the ANZ CoreLogic Housing Affordability Report revealed a top 10 list of towns where affordability has deteriorated the most.
Richmond Valley was the most impacted with the portion of income required to service a new mortgage sitting at 55 per cent in March 2020, but up to 74.4 per cent by June 2021.
“It is unsurprising that this market has topped the list. The Richmond Valley Coastal market, which includes Byron Bay, document the area as subject to high levels of investment for short term holiday accommodation, and attracting residents on high incomes, which can lead to longer-term residents and local service workers being priced out.
In fact many of the areas on this list, which have seen the biggest rise in metrics since Covid-19, have seen similar trends,” Ms Owen added.
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