Housing affordability will continue to place pressure on house price growth and lending commitments in 2011, according to Datamonitor.

Senior financial services analyst Petter Ingemarsson told Australian BrokerNews that as the average mortgage in Australia is continuing to rise faster than the average income, a house price situation is being created that "can't go on forever".

While the opposing force of housing shortgages has managed to keep house prices increasing, Ingemarsson said with a high level of national disposable income now being locked up in interest charges, affordability stress was likely and the situation was "coming to a head".

Datamonitor also expects total lending commitments to be impacted by the affordability squeeze, as the market continues to trend towards fewer mortgages at higher value through 2011.

Ingemarsson suggests if prices continue to rise, Australia will see fewer home owners as young people would be less likely to enter the ownership market. However, he argues the situation could be eased by adaptations to products, which would help younger first homebuyers into the market. 

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