Mix 106.3's Real Estate Show - 12/09/26

House prices, we know, we've spoken about this on the show many times before, house prices are falling across most of the country, including here in Canberra.

You would think that that would make housing more affordable, but apparently that is not the case.

There's some new data that's come out showing that, so we're going to find out what exactly is happening there and what is the great affordability magic trick.

Bushy Martin from KnowHow Property Finance joins us now.

Bushy, good morning.

Good morning, guys.

Now, look, tell us what's happening.

How can property prices fall while housing becomes less affordable?

Well, welcome to the great Harry Houdini housing vanishing trick, guys, where house prices shrink, your borrowing power disappears, and for the grand finale, the bank pulls a declined pre-approval out of your empty wallet.

So the answer is that house prices are only one piece of the puzzle, because higher interest rates are shrinking our borrowing power faster than prices are falling, while still raising our loan repayments.

And at the same time, our higher living costs are attacking deposit savings like seagulls and hot chips.

So Houses may be cheaper, but the finance bridge is actually narrower, which means a cheaper house you can't finance isn't more affordable.

It's just a bargain sitting behind the bank's locked door.

Okay.

And so off the back of what you're saying there, are we measuring affordability wrongly by focusing so heavily on the actual prices? Mm-hmm.

Yeah, I think we are, guys.

I think we're caught in sticker price syndrome where we're pricing the front door but ignoring the financial furniture behind us.

And according to a recent housing affordability report, a typical $125,000 household income can only afford about 12% of current homes, which is down from 43% five years ago or a 75% decrease.

So if you're only looking at the sticker price, you're not buying what I call a mortgage mullet.

So short and cheap at the front, but ugly and painfully expensive at the back.

Yeah,

yeah.

And that isn't a property ladder.

That's a fire escape with most of the rungs missing and a queue at the bottom, guys.

Yeah.