CANBERRA, Sept. 6 (Xinhua) -- Housing affordability in Australia deteriorated to a record low in the 2026 financial year, with elevated home prices and higher mortgage rates substantially reducing households' borrowing capacity, a report finds.
A typical-income household earning about 125,000 Australian dollars (about 90,000 U.S. dollars) a year could afford to buy just 12 percent of homes sold nationwide, the lowest level on record and below the previous low of 14 percent in the 2008 financial year, according to the report released Saturday by realestate.com.au.
Affordability is particularly challenging for low-income households. Those earning 76,000 Australian dollars annually could afford to buy just 2 percent of homes sold in the past year, essentially locking them out of the housing market, the Housing Affordability Report said.
The decline came following the Reserve Bank of Australia's three consecutive interest rate hikes in February, March and May to dampen inflation, the report noted.
Higher borrowing costs more than offset income growth and softening home prices toward the end of the financial year. As a result, housing affordability has declined nationwide, it said.
Affordability declined in all states in the 2026 financial year, with South Australia becoming the country's least affordable state, overtaking the state of New South Wales, the report showed.
A median-income household in South Australia could afford just 7 percent of homes, with the state capital Adelaide's median home value reaching 940,000 Australian dollars, it said. ■