Housing affordability slips further out of reach

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Housing affordability is continuing to look bleak for first home buyers, after the proportion of income required to meet loan repayments increased nationally to 31.5%, according to the REIA Housing Affordability Report.

The December 2014 quarter saw deterioration in all states and territories when compared to that of September.

REIA president Neville Sanders said there was little joy for those wanting to enter the property market.

“The latest data shows the proportion of income required to meet loan repayments increase by 1.1 percentage points,” he said.
 
“This is despite interest rates remaining historically low.”
 
New South Wales was once again named the least affordable state for homebuyers, requiring 36.2% of the average income to meet loan repayments.

In contrast, the Australian Capital Territory remained the most affordable on 20.4%, closely followed by Tasmania which saw the greatest change to 25.9%.

Adelaide Bank general manager Damian Percy said encouraging home ownership should be a key priority for home lenders.

“It’s no secret that land supply is still a major problem,” he said.

“Unless a more determined effort is made on the part of the States and Commonwealth to work more actively with local government, developers and financiers . . . there will continue to be supply-side issues that will ultimately mean further upward pressure on house prices.”
 
Despite housing affordability to slip further out of reach, steady improvements in rental affordability were recorded.
 
With 24.8% of the average income required to meet payments, rental affordability remains at the best level since the June 2009 quarter.
 
With the exception of Tasmania and ACT, all states saw a decline in rental prices.
 
The Northern Territory remained the least affordable state, sitting at 33.4%, while the ACT remained the most affordable at 17.1% of the average income.
 

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Comments
  • Zero hedge says on 05/03/2015 08:43:22 PM

    Simply not true....... Average wage is 70k which I find hard to believe in the first place.... So if the average mortgage in sydney is 900k at 5% your paying approx $1215 per week!!!

    SO HOW CAN THIS ARTICLE STATE THAT $1500pw average wage IS 31.5% of income.... More like UNAFORDABLE!!!
    It's more like 40 to 60% on average.

    This article is a lie, just like the realestate agents that push properties higher...... Your children will suffer on the selfish alter your building now!

  • cha0s says on 06/03/2015 05:48:03 PM

    My annual wage does not push past 40k per year and my partner is a stay at home mum what hope do we have of ever owning our own home. The facts in this article are completely baloney

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