Housing is becoming more affordable

Recent figures suggest that housing has become more affordable in recent years across all states of Australia.
The Real Estate Institute of Australia (REIA) – Deposit Power Housing Affordability Report showed the proportion of income required to meet the repayment of home loans has declined by one percentage point to 33.6 per cent during the September quarter.With the exception of Victoria, where the proportion of income required to meet repayment of home loans has gone up by 0.4 per cent to 35.6 per cent, all Australian states and territories recorded drops in this figure. This was led by Western Australia, which enjoyed the largest fall over the quarter, down 2.3 per cent to 23.9 per cent.

According to the REIA, this brings the state’s affordability back to the level it was in December 2003.

The REIA said the Australian Capital Territory remained the most affordable state or territory in which to buy a home, a title which the territory has held for the past five and a half years. The proportion of income to meet loan repayments declined by 0.9 per cent to 17.9 per cent over the quarter; 15.7 percentage points below the national average.

NSW remained the least affordable state or territory in which to buy a home. The proportion of income required to meet loan repayments decreased 1.6 per cent over the quarter to 37.1 per cent; 3.5 per cent higher than the national average.

In South Australia, the proportion of income required to meet loan repayments fell one per cent quarter-on-quarter to 33.5 per cent; in Tasmania it decreased 1.5 per cent to 28 per cent; in Queensland it dropped by 0.5 per cent to 32.5 per cent; while the Northern Territory witnessed a 1.4 per cent drop to 21.4 per cent.

The REIA added that the number of Home Loans taken up by first home buyers increased by 4.4 per cent to 23,997 over the September quarter and 5.4 per cent over the year. During the September quarter, first home buyers made up 15.6 per cent of the market compared to 15.4 per cent in the June quarter.

Most states have see a decline in the value of properties in some cases by as much as 25%, although the average statistics are significantly lower.

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