Buying a home has become more affordable than it has been since 2021, the Real Estate Institute of Australia (REIA) announced this week.
Housing affordability for home buyers turned a corner in the March quarter of 2024, showing improvement for the first time in three years - but it’s not such a happy tale for renters.
According to REIA President Leanne Pilkington, the proportion of income required to meet average loan repayments fell 1.0 percentage points to 46.7 per cent, due to stronger wage growth and a pause on interest rate hikes.
“This is the first improvement in housing affordability since a series of successive increases from the March quarter 2021 through to the December quarter 2023 saw this figure reach a high of 47.7 per cent”, Pilkington noted.
Housing affordability improved in New South Wales, Victoria, Tasmania and the Australian Capital Territory, remained stable in South Australia, and declined in Queensland, Western Australia and the Northern Territory. Improvements ranged from 2.2 percentage points in New South Wales, down to 0.9 percentage points in Victoria and the ACT.
While ownership affordability improved, however, rental affordability declined across the country.
Nationally, the proportion of income required to meet median rents increased 0.5 percentage points over the quarter to 24.4 per cent. Rental affordability fell in all states and territories, ranging from 0.2 percentage points in Victoria to 0.7 percentage points in Tasmania.
Over the March quarter, the average loan size decreased to $607,095, a fall of 1.1 per cent over the March quarter but an increase of 3.5 per cent over the 12 months.