Best rental affordability results since 2007

WITHIN REACH: Home ownership and renting affordability has increased throughout Australia. Photo: Shutterstock
WITHIN REACH: Home ownership and renting affordability has increased throughout Australia. Photo: Shutterstock

Housing affordability has improved slightly across the country in the June quarter, according to the recently released REIA Housing Affordability Report.

REIA president Adrian Kelly said rental affordability had improved in both the June quarter and the past year.

"The proportion of income required to meet rent payments decreased to 23.3 per cent in the quarter, a decrease of 0.4 percentage points over the quarter and down 0.5 percentage points compared to the same time last year," said Mr Kelly.

"This can be mainly attributed to the reduction or stabilisation of rents during the June quarter with only the Australian Capital Territory having an increase in rents.

"Rental affordability has not been this high since December 2007, a positive for renters in these COVID times."

Mr Kelly also said the proportion of household income required to meet loan repayments decreased by 0.2 percentage points to 34.5 per cent over the quarter.

"Even though the family income only increased 0.1 percentage point during the period, the average loan repayment decreased 0.6 percentage points through a drop in the average variable standard interest rate."

The Report also shows the total number of new loans have declined compared to both the March quarter of 2020 and the June quarter of the previous year.

"This is the lowest number of new loans issued in the past five years...and reflects the reduced activity in the housing market as a result of restrictions associated with COVID," said Mr Kelly.

Housing affordability in New South Wales increased by 2.4 percentage points compared with the corresponding quarter 2019 and Victoria by 2.0 percentage points.

Meanwhile, the average loan size in Queensland increased to $414,426, an increase of 0.1 per cent during the quarter and 3.5 per cent for the Northern Territory.

In South Australia, Tasmania, West Australia and the Australian Capital Territory, the number of loans to first home buyers increased over the quarter by 4.6 per cent, 8.2 per cent 0.7 per cent and 2.5 per cent respectively.

The quarterly Housing Affordability Report is the most authoritative indicator of Australian housing affordability influencing government, developers and major consultancy groups.