Housing affordability worsened in all but one capital city in the 12 months to the end of March according to analysis from a global credit rating firm.

According to the RMBS -- Australia: Housing Affordability Has Deteriorated, but Worst May Be Over report from Moody’s, national housing affordability worsened by 0.6% in the 12 month period.

"During the 12 months to 31 March 2016, Australian households spent an average of 27.6% of their monthly income on mortgage repayments, up from 27.0% for the 12 months to 31 March 2015," Moody’s analyst Natsumi Matsuda, a Moody's Analyst.

"Nevertheless, housing prices fell during the three months to 31 March 2016, suggesting that repayment costs may have peaked," Matsuda said.

Last week’s cash rate cut could be a double edged sword for affordability, with Moody’s saying it will help by making repayments cheaper, however low interest rates could place upward pressure on house prices.

According to the Moody's report, affordability improved in all Australian capital cities during the three months to 31 March 2016, but the degree of improvement was insufficient to head off the year-on-year deterioration.

Over the year to the end of March, Perth was the only city where affordability didn’t deteriorate.

As of 31 March, households in Perth were spending 21.5% of their monthly income on mortgage repayments compared to 22.6% a year prior.

Sydney continued to be the most unaffordable city for homebuyers, with households spending an average of 35.6% of their income on mortgage repayments as of 31 March 2016, followed by Melbourne.

Households in Melbourne spent an average 30% of monthly income on mortgage repayments compared with 27.2% a year ago.

Affordability also deteriorated in Adelaide (to 23.2% from 21.9%) due to moderate price increases combined with income declines, and Brisbane (to 24.3% from 23.6%).

The Moody’s research shows that nationally housing is currently more affordable than compared to the 10-year average; however buyers in Sydney are paying 1.7% more of their monthly incomes towards mortgage repayments than the average over the past 10 years.