Housing affordability is at its best level since 2009 because of low interest rates and falling house prices in the biggest cities, says Moody’s Investors Service. “Housing affordability improved in Sydney, Melbourne, Brisbane, Perth and Adelaide over the year to September,” says Moody’s vice president Alena Chen.

House prices fell, on average, 1.5% over the five months to September, though prices are still up 3.2% over the year – and most the price decline has occurred in the two biggest cities.

On average, Australian households need 23% of their monthly income to meet mortgage repayments, compared with 25% a year ago and 26% on average over the last 10 years.

Sydney remains the least affordable, with new borrowers needing 30% of household income to meet repayments, compared with 25% in Melbourne. But borrowers in Adelaide and Brisbane need only 19% of their household income for their mortgages while Perth is the most affordable city, needing to just 15%.