A new national affordability report has ranked Tasmania among the worst states in the nation. Picture: Supplied

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A TYPICAL Tasmanian family cannot afford to buy an average home.

Fewer than one in 10 homes sold over the past year would be affordable for them. And a purchase at this level will plunge them into mortgage stress.

This was among the dire findings in the second annual Housing Affordability Report, released by PropTrack today.

The property data business ranked Tasmania behind only NSW on the affordability scale, a significant deterioration from just six years ago when the Apple Isle was Australia’s most affordable state.

Today, a median income household — about $80,095, far lower than the national average of $112,000 — can afford just 9 per cent of the homes that were sold over the past year.

And for those earning $60,000, just 5 per cent of homes would be available to buy.

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PropTrack economist Angus Moore. Picture: Supplied

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PropTrack senior economist, and report co-author, Angus Moore said households in this income bracket would be singles, young people and retirees.

“At just 5 per cent, you are effectively locked out of the market,” Mr Moore said.

“It is such a small share of sales, it’s almost impossible to secure a home.

“These homes may not be located where these buyers need to live, could be the wrong size, or in this price range they might be knockdowns.”

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The report shows that low and middle income brackets can afford the smallest share of homes on record, and even those in the 80th income percentile can afford slightly less than half of the homes sold last year.

Tasmania’s status as a low-income state coupled with substantial price growth pre and during the pandemic is a major factor contributing to the unaffordability of housing.

No.19 Dalgety St, Claremont is for sale with Fall Real Estate, priced at “Offers over $595,000”. Picture: Supplied

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No.123 Gunn St, Bridgewater is for sale with Petrusma Property, priced between $395,000 and $445,000. Picture: Supplied

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Mr Moore said as recently as 2016, a median-income Tasmanian household could afford half of the homes sold across the state.

However, the state’s limited price growth — more or less flat over the past 12 months — is something of a silver lining.

“Slower price growth has worked to limit the affordability decreases seen across other parts of the country,” Mr Moore said.

“But it is still challenging as affordability in Tassie has been one of the worst hit areas. It’s going to take a lot to bring it back to being a more affordable part of the country.

“Our records show repayments for a median priced home for an average family have never been higher.”

The share of income needed to service mortgage repayments on a median-priced home is now a record high 35 per cent, the report says.

This exceeds Tasmania’s peaks of 33 per cent in 2007-08 prior to the GFC, and 30 per cent of income in 1988-89 when interest rates were over 15 per cent.

PropTrack, Tasmania’s Housing Affordability Index.

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Tasmania’s affordable share of homes sales by household income, per PropTrack’s latest affordability report.

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Elders Real Estate Hobart agent Todd Stevenson said there has been an increase in first home buyers in the market in recent weeks.

“This is most likely due to stable interest rates — and the commentary suggests rates will soften in coming months — plus the market has returned to a fairer playing field for all buyers,” he said.

“Stability is key. Volatility instils no confidence for those entering the market for the first time.

“The increase in property values has impacted first home buyers. However, our current market has stabilised, and the FOMO is no longer a factor.”

Elders Tasmania agent Todd Stevenson. Picture: Supplied

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Mr Stevenson said FHBs are educated on how to take advantage of housing help.

“They are highly aware of the $750,000 cap for stamp duty. It’s a substantial saving and allows them to use their deposit to pay more down on their home,” he said.

“The desire to own your own outright is still more desired, but a small number of people are using the government’s MyHome scheme.”

To read the report visit realestate.com.au/insights