Rental affordability improved in all states and territories except for Victoria and Tasmania, according to research from the Real Estate Institute of Australia and Adelaide Bank.
REIA president Malcolm Gunning said that the September quarter 2018 edition of the Adelaide Bank/REIA Housing Affordability Report found that housing affordability has shown improvement across Australia, except for Queensland where it has remained stable.
“The Northern Territory showed the most improvement in rental affordability, while New South Wales showed the most improvement in housing affordability over the quarter,” Mr Gunning said.
“Over the quarter, the proportion of median family income required to meet rent payments decreased by 0.2 [of a percentage point] to 23.9 per cent, while the proportion of median family income required to meet average loan repayments decreased by 0.8 [of a percentage point] to 31.4 per cent.”
The report also found that across the country, the number of loans decreased by 4.8 per cent, with decreases in all states and territories. The largest fall, 7.8 per cent, was in the Australian Capital Territory.
New loans also decreased by 11.9 per cent from the same quarter in 2017. All states and territories showed an annual decline in new loans, except for Tasmania where there was a 2.7 per cent increase. The decline ranged from 17.6 per cent in Western Australia to 4.4 per cent in South Australia.
“Despite improved housing affordability, the number of first home buyers decreased by 2.0 per cent over the quarter. However, the results are mixed around the country, with large increases in the Northern Territory of 14.7 per cent and a decline in Western Australia of 5.7 per cent.”
Mr Gunning said that the decline in first home buyers is symptomatic of the emerging credit squeeze.
“While APRA’s restrictions were designed to curb high-risk lending practices, the current practice of reducing loan amounts and increasing approval times across the board is becoming a constraint on economic growth.”