Housing affordability at worst level in 30 years, says PropTrack

A cyclist rides by an 'auction' real estate sign out the front of a house

Housing affordability in Australia has hit its worst level in three decades, according to PropTrack. 

The PropTrack Housing Affordability Index reveals that households of all income levels could afford the smallest share of homes since the index’s inception in 1995, with those in New South Wales, Tasmania, and Victoria up against the toughest affordability conditions in the country. 

The data presents a worrying statistic: a household earning a median income of $105,000 could only afford to purchase a mere 13% of the homes sold in the last 12 months.

As both home loan interest rates and house prices leapfrog towards unaffordability, it’s easy to get lost in the overwhelming sense of housing-FOMO that rears its ugly head every time you switch on the six o’clock news.

So what can you do if you’re looking to buy in the near future? 

Look to buy in less competitive property areas 

It might seem like a painfully obvious piece of advice, but choosing an area that less people want to live in can sometimes equate to lower prices. 

While it might not be your ideal suburb or region, finding a home in an area that’s a short train trip, or quick drive, away from where you’d prefer to live is a concession you can make that may get you closer to your dream of homeownership sooner. 

Check government home owners grants or schemes

Australian states and territories often run some sort of First Home Owners Grant (FHOG), with some even offering stamp duty exemptions. These grants are usually only available to those getting their first home loan and come with eligibility requirements to be aware of.

Various government grants which you may be entitled to include: 

  • First Home Super Saver Scheme 
  • First Home Buyers Assistance Scheme (NSW) 
  • First Home Buyer Duty Exemption, Concession or Reduction (VIC) 
  • Home Buyer Concession Scheme (ACT) 
  • First Home Transfer Duty Concession (QLD) 
  • First Home Vacant Land Concession (QLD) 
  • First Home Builder Boost (Tasmania) 
  • BuildBonus Grant (Northern Territory) 
  • Territory Home Owner Discount (Northern Territory) 
  • First Home Owner Rate of Duty (WA). 

Buy an investment property interstate 

If you’re in NSW, Tasmania, or Victoria, and can’t afford to purchase your own place in your state, then consider taking the long route to homeownership by purchasing an investment property in a cheaper state. 

Western Australia, Queensland, and South Australia all rank higher in affordability, according to PropTrack. So, it may be worth considering using your deposit to purchase an investment property first, which you can later use as equity to purchase your own home.

This of course hinges on the way the market moves in each state or territory, so it’s important you do your research before heading down this route. 

It’s also unlikely that you’ll receive any FHOGs, as those are primarily for owner-occupiers, not investors. 

Go halves with a sibling, partner or friend 

If you’re single, or don’t have enough of an income to buy a place on your own, consider teaming up with a sibling, friend, your partner, or even with your parents

In the same way that two heads are better than one, two incomes are looked upon favourably by lenders when you apply for a home loan, and could lessen the financial strain of regular costs, like your mortgage repayments – not to mention teaming up on the deposit. 

By getting more money into the mix, you’ll theoretically be able to open up more of the housing market by increasing your combined income. 

Just make sure you iron out the details of each party’s rights and responsibilities when it comes to jointly owning a property, especially when buying a place with friends.  

Use the time to save for a home deposit

If you’ve crunched the numbers using a mortgage repayments calculator and found your monthly income won’t stack up, or you just can’t find any places under budget, then it might be time to go back to the drawing-board and save up a larger deposit. 

If you’re wondering how to save for a home deposit, there are a few ways to get yourself on track. These could include: 

  • Assessing your spending to find expenses you can slash
  • Creating a budget to get your savings under control 
  • Getting your debts under control 
  • Finding a high-interest savings account to boost your nest egg. 

Compare home loans 

If you’ve saved up your deposit and are ready to pounce on a property, then your next port of call is going to be a home loan comparison.

Comparing home loans is a good way to find interest rates that fit your budget, or products with features that you want, like offset accounts or redraw facilities. 

Mozo makes comparing some of the best home loans in Australia simple, with at-a-glance interest rates, estimated monthly repayments, and a quick overview of each product's features. 

Take a look at some of the featured products in the Mozo database below. 

Home loan comparisons on Mozo - last updated 30 May 2024

Search promoted home loans below or do a full Mozo database search. Advertiser disclosure
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