Housing affordability continues to decline, according to the Real Estate Institute of Australia Deposit Power Housing Affordability Report.
The Report found that affordability dropped again over the June quarter, marking the sixth consecutive quarterly fall.
In addition, the percentage of income required to meet loan repayments now sits at 35 per cent, a level not seen since late 1990.
In the third quarter of 1990, average banks’ variable mortgage rates were at approximately 16.4 per cent, and a real concern for the current climate, REIA president David Airey said.
“With the exception of Tasmania and the Northern Territory, housing affordability decreased across all Australian states and territories, with the proportion of income required to meet loan repayments increasing 2.0 percentage points nationally,” he said.
Deposit Power national manager Keith Levy said housing affordability remains an ongoing issue for many Australian home owners and prospective buyers.
“There is still a shortage of homes for sale and it appears that new development and construction isn’t keeping pace with demand in some areas.”
“As a result, the cost of entering the market remains high and the dream of owning a home still appears to be far from reality for many Australians,” he said.
According to the report, the ACT remains the most affordable state or territory in which to own a home, with the proportion of income required to meet loan repayments increasing to 18 per cent –16.6 percentage points below the national average.
New South Wales remains the least affordable place in which to own a home, with the proportion of income required to meet loan repayments increasing to 38 per cent – 3.4 percentage points above the national average.
“The evidence for action on affordability is clear,” REIA’s Mr Airey said.
"There should be no further increases in interest rates as well as action from the new Government on the supply side factors and an increase in the First Home Owners Grant with indexing to median house prices.”