Renters across the country continue to suffer as tight vacancy rates push rents up in all capital cities, with the proportion of income required to meet rent payments up from 24.7% in the March quarter to 25.0% in June.
Despite slight improvements in rental affordability over the three months to June, Tasmania is still the least affordable state in Australia to rent, with 29.2% of the median family income required to meet rental expenses, said Keith Levy, national manager at Deposit Power.
Levy added that a rate cut, coupled with continued demand for rental property, indicates that there may be potential for stimulated activity in the housing market in the months ahead.
Homeowners are also suffering, now spending a larger portion of their household income to meet their home loan repayments, according to the Deposit Power/REIA June quarter 2008 Housing Affordability Report.
Nationally, 39.8% of household income is now spent on the mortgage - the highest level in 22 years.
"The report shows a deterioration in both rental and home loan affordability across every state and territory in Australia for the first time since March 2004," said Noel Dyett, president of the Real Estate Institute of Australia.
"The situation is most severe in NSW and Queensland, where the proportion of income required to meet loan repayments increased to 42.6% and 41.0% respectively."
This week's rate cut would be welcome news for homeowners around the country, who have been "suffering under the strain of higher interest rates and increasing living costs for some time now", Dyett added.
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