Predicted zero growth in house prices good for first home buyers

In its most recent Property Focus report, ANZ has trimmed its prediction of house price growth from 2.5% to zero, “given soft near-term price momentum”.

Meanwhile, Cotality chief property economist Kelvin Davidson says lower mortgage rates, steady income growth and a decline in property values have contributed to national house values sitting about 7.5 times household incomes in the second quarter, the lowest level since mid-2019.

Mortgage repayments now absorb about 44% of median household income, compared with a peak of 57% in 2022. “That takes servicing costs back to their lowest level in more than four years and only marginally above their long-run average of 43%,” Davidson says.

Servicing costs at or near their long-term average suggest that affordability is no longer the handbrake it was during the downturn.