Sydney affordability woes worsen
Two full-time wages are no longer enough to service a mortgage on a Sydney home.
According to a report by the Sydney Morning Herald, more than two average full-time wages are required to affordably service a home loan for a home in Sydney. The Housing Industry Association (HIA) housing affordability index has revealed that a standard mortgage on an average-priced home in Sydney would cost $4,729 per month, or $57,000 per year.
The report found that this was more than 30% of the earnings of a household on two average full-time wages. The 30% threshold is considered the proportion of income that can be affordably dedicated to home loan repayments.
"This quarter's result is a further widening of the affordability gap between Sydney and everywhere else. It has the lowest affordability in the country by a large margin,” the report said.
The report found that it took approximately 2.06 full-time wages in Sydney to service a home loan affordably. This was up from the revised 2.04 wages found in the March quarter. The March result was the first time the average full-time wages needed to service a Sydney home loan rose above 2.
Melbourne was the second least affordable city, requiring 1.64 average full-time wages to comfortably service a standard loan on an average-priced house, the SMH said.
In one bit of good news for prospective Sydney buyers, prices in the city do appear to be slowing. The latest CoreLogic house price index has revealed Sydney dwelling prices remained flat in August.