Australian housing affordability has improved slightly over the March quarter, according to Adelaide Bank and the Real Estate Institute of Australia.
Their latest housing affordability report said the proportion of income required to meet loan repayments decreased 0.2 percentage points to 30.6% over the quarter.
REIA president Peter Bushby said compared to a year earlier, housing affordability improved in all states and territories but first home buyers were still lagging.
“Disappointingly, first home buyers were still at very low levels and made up just 12.8% of the owner-occupier market. Despite a small increase from its lowest point ever, this figure remains persistently low compared to the long-run average proportion of 19.8%.”
Victoria continued to lose first home buyers following changes by the state government, with numbers down by 13.3% over the March quarter and 26.5% compared to a year earlier.
Queensland, however, was up by 25% over the past 12 months in first home buyers, the report said.
Overall, ACT remained the most affordable state or territory in which to buy a home with the proportion of income required to meet loan repayments sitting at 19.8%.
New South Wales was the least affordable state or territory in which to buy a home, with the proportion of income required to meet loan repayments 4.0 percentage points above the national average.
But not all are convinced by the latest figures.
Economist Leith van Onselen termed the report “bogus”, and picked out suspected anomalies, such as that house price gains outpaced rental growth, but rental affordability had worsened over the quarter.
“What makes this quarter’s improvement so curious is the fact that it has come despite negative real wages growth, stable mortgage rates, and ongoing solid house price growth,” he said.