Australian housing affordability improves to ‘best in a decade’ level.
The June Quarter 2013 edition of the Adelaide Bank/REIA Housing Affordability Report showed an improvement in housing affordability with the proportion of income required to meet loan repayments decreasing 1.2 percentage points to 28.7%.
“Successive reductions in interest rates mean that housing affordability has been improving slightly for the last two years. The proportion of family income required to meet loan repayments is now at its lowest since the June quarter of 2003”, said Damian Percy, General Manager, Adelaide Bank.
“Over the June quarter of 2013, rental affordability also improved with the proportion of income required to meet rent payments decreasing 0.7 of a percentage point to 23.7%. Compared to the June quarter of 2012, the proportion of income required to meet rental payments decreased 0.8 percentage points.
Buy VS Rent?
“Interestingly, the proportion of family income required to meet average loan repayments in Western Australia and Tasmania is almost exactly the same as that required to meet median rental payments. This factor, combined with recent changes in concessions to first home buyers in WA could help explain the surge in first home buyer activity in these states.
“NSW retains the crown for least affordable State or Territory in which to buy a home or rent with over 34.3% of family income required to meet loan repayments, while the ACT remains the most affordable with just 16.4% of family income required for loan repayments and just 14.5% needed to rent in our nation’s capital”, concluded Mr Percy.
The Adelaide Bank/REIA Housing Affordability Report is available to be purchased from http://www.reia.com.au.