Rental affordability has improved marginally across Australia, despite dwelling prices continuing to rise, a new report has shown.
Figures from Real Estate of Australia’s (REIA) latest quarterly Housing Affordability report revealed that rental affordability has improved by 0.3 per cent nationally over the June 2021 quarter.
This means that the proportion of income required for rent across the nation has decreased to just 22.8 per cent.
According to REIA president Adrian Kelly, the improvement in rental affordability was most apparent in New South Wales, Victoria, Queensland, and South Australia.
Meanwhile, Tasmania and the Australian Capital Territory remain stable.
“Despite the prolific media headlines about availability and cost of private rentals, affordability of rent to median income remains by and large constant and should be reflected in state and federal government housing policy settings.
“As we enter spring selling season, half of Australians are living under lockdown conditions and Australia has only just narrowly missed a technical recession,” Mr Kelly said.
Western Australia remained the most affordable place to rent, with median income to rent ratio sitting at 19 per cent.
On the other hand, Tasmania was the least affordable, with 29.9 per cent of median income required to meet rental commitments.
“[Amid] sustained low interest rate environments, there are still opportunities where it is cheaper to rent than buy,” according to the president.
In contrast with rental affordability, housing affordability declined 2.1 per cent over the quarter, which means that the proportion of income required to meet loan repayments now sits at 35.4 per cent.
Mr Kelly said the deterioration of affordability in house sales was reflected in the premiums recorded across combined capitals, where the median house price increased to $913,946 while the average loan size increased by 8.3 per cent.
Across states and territories, only Tasmania and the Northern Territory saw housing affordability improve over the June quarter.