Australian housing affordability has improved to its ‘best level in a decade’, according to the Real Estate Institute of Australia (REIA)/
The June quarter of 2013 recorded an improvement in housing affordability, with the proportion of income required to meet loan repayments dropping1.2 percentage points to 28.7%
With the exception of the Northern Territory, the REIA say all states and territories demonstrated improvements over the quarter; the largest of which was in Queensland, where the proportion of income required in order to meet loan repayments dropped by 1.9 percentage points to 26%.
“The second quarter of 2013 has seen further improvement in housing affordability…That means that housing affordability has been slightly improving for two consecutive years now and the proportion of income required is at its lowest since the June quarter of 2003,” says REIA president, Peter Bushby.
“All states and territories recorded improvements over the quarter except for the Northern Territory.”
The Australian Capital Territory remains the most affordable state or territory in which to buy a home, with the proportion of income required to meet loan repayments 12.3 percentage points below the national average.
New South Wales, on the other hand, remained the least affordable, with the proportion of income required to meet loan repayments 5.6 percentage points higher than the nation’s average.
However, Bushby says first home buyers are still struggling, making up just 14.6% of the owner-occupier market compared to 14.5% in the previous quarter. The figure remains persistently low compared to the long-term average of 20%, despite frequent RBA interest rate cuts over the past two years.
“According to the QBE Lenders’ Mortgage Insurance 2013 Mortgage Barometer Report, 84% of first home buyers believe property prices are close to or above what they can afford and 69% worry they will never be able to afford their own home” says Bushby.
“The availability of affordable housing is a goal that is espoused by governments and all sectors of the community, yet at the national level there is no comprehensive policy or plan for its achievement. In the lead up to the federal election, that’s what REIA would like to see.”