Australia's house prices are falling. But will that make homes more affordable?

Key points

• Australian house prices are more than 5 per cent below their peak, with forecasts pointing to further falls. Four rate hikes this year have cut borrowing capacity by about 9 per cent for a median-income household, according to Cotality.
• New Zealand and Canada have both seen larger price falls since their pandemic peaks, and affordability has improved in New Zealand as interest rates have dropped.
• Economist Saul Eslake says Australia's downturn is only beginning, and that a 10 to 15 per cent fall over two years could improve affordability.