But property prices did not fall as steeply and are now going up again, leaving buyers squeezed as both sticker prices and mortgage costs get more expensive.Credit:A home hunting couple with no children could spend $1,038,000 at auction while the cash rate is 4.1 per cent, modelling from comparison platform Canstar shows.
The bank on Tuesday held interest rates steady for the second straight month, saying recent data showed inflation was falling, and higher interest rates were working to balance supply and demand. Canstar group executive of financial services Steve Mickenbecker said affordability has worsened despite the drop in property prices since early 2022.“In April last year before the Reserve Bank moved, the really limiting factor on people was the amount of deposit they could put away.He highlighted the budget of a single buyer which has fallen from $606,000 pre-rate hikes, to $445,000.
“It means people end up having to settle on a lower quality property, or a smaller property, or less desirable area, or rely on the Bank of Mum and Dad,” he said.An upgrading couple with a 40 per cent deposit would still have a budget of $1,391,000 at a cash rate of 4.1 per cent, although this had fallen by $519,000 since April 2022.
“[But] so many people are at different stages of their financial decision because of Covid - it blurs where the price ceiling is.”