Australia has suffered the largest annual decline in housing affordability since the beginning of the decade, according to the Real Estate Institute of Australia (REIA).
The REIA Deposit Power Housing Affordability Report released yesterday, has revealed that over the September quarter, the total number of loans (excluding refinancing) was down 2.9 per cent to 101,364. Housing affordability also declined 0.2 percentage points nationally in the September quarter.
Meanwhile, over the year, the total number of loans fell 28.3 per cent - the largest annual decline in Australia since March 2001, according to the report.
The proportion of income required to meet loan repayments increased 5.8 percentage points over the year to be 34.8 per cent.
"Housing affordability has reached a new low in Australia which is of great concern", REIA president David Airey said.
"Compared to the same quarter of the previous year, all states and territories recorded a decline in housing affordability.
"The largest decreases were evident in New South Wales and Victoria where the proportions of income required to meet loan repayments increased 6.5 and 7.5 percentage points respectively," Mr Airey said.
Keith Levy, national manager of Deposit Power, said there had been reduced sales from property investors in the last quarter, as many purchasers appeared to be taking a ‘wait and see' approach.