It would require 12 years for a person living in Sydney to accumulate a 20 per cent deposit for a mortgage, according to new research.
On top of that, after saving for more than a decade, Sydneysiders require, on average, 51.6 per cent of their income to service a new mortgage - well and truly putting many in mortgage stress.
The ANZ CoreLogic Housing Affordability report found as Aussies were being pushed out of the housing market, rental affordability had worsened.
Up to 50% of income needed to afford a rental
A lack of affordable rental properties, mixed with an increase in renters, had deteriorated affordability, the report found.
The report found the amount of money Aussies needed to afford rent was at its highest level since June 2014, with 30.8 per cent of income required to afford a new lease - based on the average household income.
At the lower household income level, 51.6 per cent of income would be required, suggesting there was even more pressure on lower-income Aussies.
ANZ senior economist Felicity Emmett said it was important to factor in rental metrics when looking at housing affordability in Australia.
“Heightened economic uncertainty has seen a decline in sales volumes in the private market and an increase in those seeking rental accommodation. Paired with a decline in social housing, rental demand pressures are being felt in all income brackets,” Emmett said.
Rental vacancy rates as of April 2023 were 1.1 per cent nationally, below a decade average of 3 per cent. In the same period, total rent listings were 38.1 per cent below the previous decade average.
Aussies relocating pushes up rent prices
An increase of Aussies heading to the regions during the pandemic pushed rent prices higher in both regional Australia and in major cities, the report found.
Since March 2020, rent values have increased more in regional markets, at 28.8 per cent, compared to 24.4 per cent in capital cities.
CoreLogic Australia head of research Eliza Owen said rental demand had seen some extraordinary shifts in the past three years, with fewer people per household requiring more homes, coupled with a strong return in overseas migration.
More recently, rental growth has eased across the regions while ramping up in capital cities.
"As rents have risen sharply, the increase in the cash rate, and pressures in the construction sector have slowed the rate of dwelling completions. This has meant investor conditions are not ideal, and has stemmed the flow of new rental properties to the market,” she said.
“Through February and March, ABS lending data has shown signs of an increase in investment borrowing, but it will take some time for a supply response to ease pressures in the rental market.”