As Australia grapples with an unprecedented housing affordability crisis, the latest report from the Real Estate Institute of Australia (REIA) underscores the severity of the issue.
The December quarter saw affordability plummet to record lows, with mortgage repayments now consuming over half of the median family income – a stark indicator of the worsening landscape.
REIA President Leanne Pilkington (pictured) painted a grim picture, noting, “The average loan repayment now amounts to 50.1% of the median family income, the highest proportion since monitoring began in 1996.”
With the 2025 election looming, housing affordability is catapulting to the forefront of national discourse.
A survey by PowerHousing Australia, spanning 24 key electoral divisions, revealed that 72% of voters identify housing as a pivotal issue, with significant support for enhanced community and social housing initiatives.
This sentiment is echoed across political lines, with a strong majority advocating for government action to address the crisis.
The impact of rising property prices is felt nationwide, but regions like Western Australia and Victoria are particularly affected, experiencing the most significant declines in affordability, REIA reported.
Despite a modest increase in median family income, the gap between housing costs and earnings continues to widen, compounding the challenges for potential homeowners.
On a somewhat positive note, REIA reported hints at possible improvements in 2025, thanks to recent interest rate cuts by the Reserve Bank (RBA).
Each 0.25% rate reduction is historically linked to a decrease in the income proportion needed for mortgage servicing, suggesting upcoming relief for strained home buyers.
While homeowners struggle, the rental market has shown marginal improvement.
The proportion of income needed for median rent slightly decreased, though New South Wales remains the least affordable state for renters, REIA data showed.
The shift in rental affordability, albeit small, provides a glimmer of hope in a predominantly bleak housing market.
The profound impact of housing costs is not only a financial strain but also a significant electoral issue.
As parties gear up for the 2025 elections, the focus on housing affordability strategies could be decisive in swaying voter preferences, especially among those hardest hit by the crisis.
The overwhelming call for more robust government intervention in housing could shape the policy landscape significantly in the coming year.
This critical issue remains at the heart of political and economic discussions as Australia approaches a pivotal election, with the potential to redefine the future of housing policy and economic stability.
