Housing affordability hits 28-year low, REIA report finds

Housing affordability in Australia has declined to its lowest point since monitoring began in 1996, according to the latest Housing Affordability Report from the Real Estate Institute of Australia (REIA).

REIA President Leanne Pilkington said the average loan repayment now amounts to 48.1% of the median family income, an increase of 1.3 percentage points from the previous quarter.

“The report highlights the impact interest rate increases and rising inflation have had on Australians in regards to both rent and home ownership,” Ms Pilkington said.

Key findings from the report include:

• Housing affordability declined in all states except Victoria, with small improvements in the Northern Territory and Australian Capital Territory
• The proportion of income required to meet median rents increased 0.2 percentage points nationally to 24.6%
• The number of first home buyers increased by 18.6% to 30,636, representing 36.6% of owner-occupier dwelling commitments

Despite the overall decline in affordability, Ms Pilkington noted some positive trends:

• The number of first home buyers increased in all states and territories
• The total number of owner-occupied dwelling loans increased by 18.8% to 83,599

The average loan size to first home buyers increased to $532,429, up 2.7% over the quarter and 6.8% over the past year.

Ms Pilkington said the Reserve Bank of Australia maintained the official cash rate at 4.35% throughout the June quarter, with the quarterly average standard variable interest rate remaining stable at 8.8%.

The REIA represents 85% of Australian real estate agencies and advocates for the industry, which comprises 46,793 businesses employing 133,360 Australians.