Housing Affordability Part 1
/Which way for property prices this year? This is driven in part by housing affordability. But what do we mean by affordability and how do we best measure it? To my mind there are several ways of looking at housing affordability:
House prices versus average incomes
Proportion of household income needed to purchase an average property
Average weekly rent versus average incomes
Each of these methodologies tells a different story.
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Loanscape has today released its Borrowing Capacity Index for Q2/2024. It shows that the borrowing capacities of Australian individuals and families have stabilised after the sharp decline over the past 2 years. Lower income borrowers continue to be disproportionately impacted by interest rate increases: the family income required to qualify for the average size loan in Australia is 35% higher than 2 years ago.