Housing affordability has plunged to a 20-year low, but first-home buyers are still finding ways to get into the market.
Despite interest rates starting to come down, surging house prices have made it harder than ever for Australians to buy a home, according to a report from PropTrack and Commonwealth Bank released on Thursday.
It found a typical first-home buyer household could only afford mortgage repayments on 17 per cent of dwellings in Australia.
But despite the storm of challenging conditions, more first-home buyers are entering the market than a decade ago.
The report said saving for a deposit and making repayments were the two biggest challenges for Australians looking to buy their first property, and savvy buyers were finding a number of workarounds to afford the purchase.
Three-quarters of first-home buyers are getting a mortgage with a deposit of less than 20 per cent, either shelling out for lenders mortgage insurance or relying on government programs such as the home guarantee scheme, which allows for a deposit of five per cent.
The report says the situation is likely to get better, with the Reserve Bank widely tipped to cut interest rates again later this year.
"Interest rates have already fallen from their peak, and further cuts are expected," REA Group senior economist Angus Moore said.
"While home prices are rising, lower mortgage rates will likely help put more homes within reach of first-home buyers."
At the same time, the head of Australia's largest super fund has warned of "intergenerational unfairness and inequity" in the housing market.
"If you were in the start of the 1970s, it would cost you... twice your family's income to buy a house," AustralianSuper chief executive Paul Schroder told the National Press Club on Wednesday.
"Now, it costs six-and-a-half times, and sometimes nine."
Mr Schroder insisted overhauling tax concessions on superannuation would have an "immaterial" impact on the housing market.
"We've underbuilt for 40 years. It's not a demand-side issue. It's not a financing issue. It's not a funding issue... we need to build, baby, build," he said.
