Editor's note

While the price of a median Sydney house is now 12.2 times the median salary it is not less affordable than thirty years ago. As Jamie Alcock argues, falling interest rates have only made houses more affordable. But the flip-side is greater risk. Low interest rates mean home buyers face much higher “interest rate risk” than previous generations, combined with a worse outlook for house prices.

Josh Nicholas

Deputy Editor Business & Economy

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Declining interest rates have been working for home buyers, now they are working against them. Shutterstock

Houses aren't more unaffordable for first home buyers, but they are riskier

Jamie Alcock, University of Sydney

Declining interest rates has made housing more affordable over the past thirty years, but it has also increased the risk for homebuyers.

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