From Moody’s:

Moody’s Investors Service says housing affordability deteriorated on average across Australia over the year to March 2017, a credit negative for Australian residential mortgage backed securities (RMBS).

Rising housing prices outstripped the positive effects of lower interest rates and moderate income growth.

In the near term, Moody’s expects housing affordability to continue to deteriorate because of ongoing housing price increases.

Moody’s measures housing affordability as the proportion of household income needed to meet mortgage repayments. Less affordable mortgages increase the risk of delinquencies and defaults and are therefore credit negative for Australian RMBS.

On average across Australia, Australian households with two income earners needed 27.9% of their monthly income to meet monthly mortgage repayments in March 2017, up from 27.6% in March 2016.

Housing affordability deteriorated in Sydney, Melbourne and Adelaide, where housing prices increased the most over the year to March 2017, but improved in Perth and Brisbane.

For more details, please find below press release and attached just-released report entitled “RMBS — Australia: Housing Affordability Worsening Amid Rising Property Prices”.