Housing affordability peaked in June, prices could reach record highs again in 2020: ANZ CoreLogic
Property prices could reach record highs in the first half of 2020 if they continue at current rates, according to research by CoreLogic and ANZ.
Melbourne and Sydney house values have risen six per cent and 5.3 per cent since May.
CoreLogic's head of research Tim Lawless says there's more urgency coming back in to the market.
"If this trend continues, we could see property prices reach new highs early next year," Lawless said.
CoreLogic and ANZ's research, which suggests housing affordability peaked in June after the national 8.4 per cent decline from 2017 ended, shows dwelling values and household incomes at the closest levels since late 2013.
As of June national dwelling values were 6.5 times higher than gross annual household incomes.
Dwelling value to household income ratio: CoreLogic ANZ
Since June however, dwelling prices have outweighed the growth in income, suggested ANZ senior economist Felicity Emmett.
"Although affordability has improved following a downturn in housing values, June 2019 marked a turning point as dwelling values again began to outpace household incomes across capital cities, with the exception of Perth and Darwin," Emmett noted.
“The rebound in prices is being driven by a number of factors including record low interest rates, easier access to credit and more certainty around tax arrangements,” Emmett said.
Lawless said that despite the dwelling value jump in the last few months there is still good news for prospective buyers and renters.
"The research shows households are now dedicating the smallest proportion of their incomes towards paying a new mortgage since early 2004 and renters are spending the lowest proportion of their income on accommodation since 2007," Lawless said.
“This year, we have also seen an increase in the number of areas where it is cheaper to buy than rent, which can be attributed to the lowest interest rates since the 1950’s together with lower housing prices relative to the market peak."
The downturn has seen the number of years to save for a deposit decline drastically, back to 2014 levels, across the country.
Time to save for a deposit: CoreLogic ANZ
