Housing affordability down, rental affordability up

Despite national figures, there are still windows of opportunity within different Australian states.

Aussie home owners are now forking out nearly a third of their annual income to meet average home loan repayments, according to research from the Real Estate Institute of Australia.¹

The group said while home loan affordability showed a slight decline in the second quarter of 2017, rental affordability had however improved marginally, with less than a quarter of the median family income now required to meet average rental costs.²

The research also highlighted that while national figures gave one perspective, there were still pockets of opportunity for both buyers and renters when looking at different states and territories in Australia.³

Australia under the microscope

Housing affordability by state and territory

The proportion of median family income required to meet average loan repayments increased by 0.2 percentage points to 31.4% (nearly a third) nationally in the June 2017 quarter.⁴

The proportion of income required to meet home loan repayments (when broken down by state):⁵

NSW – 38% (up 1.9 percentage points over the quarter)
VIC – 33.4% (up 0.9 percentage points over the quarter)
QLD – 27.2% (up 0.5 percentage points over the quarter)
SA – 26.8% (up 0.6 percentage points over the quarter)
TAS – 23.9% (up 0.3 percentage points over the quarter)
WA – 23.6% (up 0.2 percentage points over the quarter)
NT – 20.3% (down 0.8 percentage points over the quarter)
ACT – 19.8% (down 0.3 percentage points over the quarter)

Rental affordability by state and territory

The proportion of median family income required to meet rental payments decreased by 0.6 percentage points to 24.3% nationally in the June 2017 quarter.⁶

The proportion of income required to meet median rents (when broken down by state):⁷

NSW – 28.6% (down 0.4 percentage points over the quarter)
TAS – 25.8% (down 0.8 percentage points over the quarter)
VIC – 23.1% (down 0.7 percentage points over the quarter)
NT – 23.1% (down 0.6 percentage points over the quarter)
QLD – 23% (down 0.7 percentage points over the quarter)
SA – 21.9% (down 0.7 percentage points over the quarter)
WA – 18.1% (down 0.5 percentage points over the quarter)
ACT – 17.9% (up 0.1 percentage points over the quarter)

Where most first home buyers are occupying their residence

First home buyers in NSW make up only 13% of the state’s owner-occupier market, which is the lowest level across the nation, compared to 33.7% in Western Australia (the highest), 25.6% in the Northern Territory, 25.3% in Queensland and 23% in the Australian Capital Territory.⁸

1 – 8 Real Estate Institute of Australia 2017 research

Source : AMP 26 October 2017

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