Property data firm CoreLogic has compared the Australian wage price index against property values over the past 20 years, revealing the extent which housing prices have outstripped incomes.

The report found while national wages increased 81.7 per cent over the past two decades, Australian home values have risen 193.1 per cent.

In the ACT, wages across the private and public sector increased 81.5 per cent over 20 years, while dwelling values rose 224 per cent.

It represents the second largest gap between wage and house value growth in the country.

The biggest difference was observed in Tasmania where property values have risen 294 per cent, compared with a 79.6 per cent rise in wages.

Across the country, the recent surge in national housing values has further exacerbated the difference between the two metrics.

Australian dwelling values have risen 22 per cent in the past 13 months, CoreLogic data shows.

Last week, the Australian Bureau of Statistics posted a 2.2 per cent annual increase in the Australian wage price index, representing a return to pre-pandemic levels.

Ray White Group chief economist Nerida Conisbee said Australia's affordability challenges have become far worse throughout the COVID-19 pandemic.

"[Property] prices have risen to such an extent and that gap between our household income and house prices is the widest it's ever been. It's not unique to Australia, we're seeing it everywhere around the world and it has been driven, of course, by the pandemic," she said.

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"Interest rates have been very low ... so even if people's wage haven't increased by much they have been able to borrow more, they haven't been spending as much and a lot of that money has been poured into housing."

In the report, CoreLogic head of research Eliza Owen noted when house prices rise faster than incomes, saving for a house deposit becomes more challenging.

"This tends to lead to less demand from first home buyers through periods of rapid property price increases," she said.

Wage and house price disparity also impacted homeowners' ability to service a mortgage over time, Ms Owen said.

"The portion of income paid to service housing debt has stayed relatively low and steady over time because of low mortgage rates," she said.

"However, low inflation and wages growth means that households cannot pay down their mortgage as easily or quickly.

"This is particularly burdensome for relatively new mortgage holders, taking on long loans of 30 years, especially if mortgage rates rise."

While we can't expect a dramatic increase in wage growth, Ms Conisbee said a possible interest rate rise and restrictions on finance will have the biggest influence on the property market over the next 12 months.

In October, the Australian Prudential Regulation Authority announced tougher lending conditions, requiring borrowers to show they can keep up with mortgage payments if rates rose by 3 percentage points or more.

"That restriction does primarily impact first time buyers and people on lower incomes because obviously it's harder to pay a loan when you have to show that buffer," Ms Conisbee said.

"Next year, we are likely to see further restrictions to finance but it is likely that the restrictions will be a little bit more targeted, particularly to investors because that seems to be the buyer group that really is showing very strong activity at the moment."

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