Melbourne house prices dropped, but property is hardly more affordable – Sydney Morning Herald

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House prices may be falling but bargains are few and far between, even in outer-suburban Melton where Laurel Maddalon bought her first home just before Christmas.

The 44-year-old library officer had been looking to buy for a while, and realised the suburb was becoming much harder to afford for a person on a single income.

Laurel Maddalon found it a challenge to buy her first property on a single wage.Credit:Paul Jeffers

“When I started saving for a deposit two years ago, Melton was one of the last affordable suburbs to buy in on a single income,” Maddalon said. “But I watched as prices started to explode during COVID, and I was only able to save just enough for a 5 per cent deposit.”

Even though Melbourne’s prices recorded their steepest fall in 3 ½ years in 2022, dropping 5.6 per cent on Domain figures, housing affordability has shown little improvement.

Prices are only back to mid-2021 levels and showed signs of stabilising late last year, while rising interest rates mean buyers face much higher mortgage repayments and cannot borrow as much money.

A single person earning an average income of $92,000, with a 20 per cent deposit saved, could have borrowed enough to buy a property worth $710,000 last April, Canstar modelling shows. That’s now down to $543,750, or 23 per cent less.

Maddalon’s smaller budget meant she had to be realistic, especially as Melton prices are 11 per cent higher than a year ago, Domain data shows. She used the federal government’s First Home Super Saver Scheme to save and the First Home Guarantee to buy with a low deposit.

“I was keeping my expectations realistic,” she said. “I’m a single person on a single income, so I was looking at units … when you’re doing

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