Rental affordability improved across Australia during the second quarter of the year, according to the Real Estate Institute of Australia (REIA).
During the quarter, Australians only needed to allocate 22.8% of their income on average to pay rent, marginally lower compared to the previous quarter.
REIA president Adrian Kelly said the improvement was apparent across all states and territories.
"Western Australia remained the most affordable place to rent, with the median income-to-rent ratio sitting at 19%," Mr Kelly said.
"Meanwhile, Tasmania ranked the least affordable, with 29.9% of median income required to meet rental commitments."
On the other hand, housing affordability has worsened in most states, save for Tasmania and the Northern Territory.
According to REIA, the strong sales activity over the quarter pushed the average median house price across capital cities to around $914,000.
At the same time, the average loan size during the period increased by 8.3%.
Over the period, New South Wales reported the largest gains in the size of home loans at 11.1%, equivalent to an increase of $70,311.
Mortgage holders across capital cities set aside 35.4% of their incomes to meet loan repayments during the quarter. This was 2.1 percentage points higher from the first three months of the year.
Mr Kelly said these latest affordability indicators show there are still areas across the country where it is cheaper to rent than buy.
"As we enter spring selling season, half of Australians are living under lockdown conditions and Australia has only just narrowly missed a technical recession," he said.
Housing affordability in regional markets
A separate report from the Housing Industry Association (HIA) has shown worsening housing affordability in regional property markets.
The report found regional New South Wales clocked the biggest decline in affordability over the 2020-21 financial year, reporting a 22.8% drop compared to the preceding year.
Substantial declines in regional market affordability were also recorded in Tasmania (13.6%), Queensland (10.3%), Northern Territory (8.6%), regional South Australia (8.1%), and regional Victoria (6.5%).
HIA economist Tim Devitt said regional markets have witnessed a faster deterioration in affordability than Sydney and Melbourne.
"This is not surprising given the rapid exodus of population out of Sydney and Melbourne to other states and regions," Mr Devitt said.
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