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Over the June quarter, national housing affordability declined to the lowest point since the Real Estate Institute of Australia (REIA) first began monitoring in 1996.
REIA president Leanne Pilkington revealed that average loan repayments required 48.1 per cent of the median family income over the June quarter of 2024, rising by 1.3 percentage points over the last quarter.
This result marks the lowest point for national housing affordability since monitoring began in 1996.
The president said the latest data “highlights the impact interest increases and rising inflation have had on Australians in regards to both rent and home ownership”.
Despite Victoria seeing marginal improvement, and small improvements being recorded in the Northern Territory and the ACT, housing affordability dropped in all other states, with declines ranging from 1 percentage point in Tasmania, to 1.8 percentage points in South Australia.
Rental affordability also took a hit over the quarter, with the national proportion of income needed to meet median rents rising by 0.2 percentage points to 24.6 per cent.
Pilkington detailed that movement across the states and territories have been mixed, with rental affordability improving over the quarter in NSW, Tasmania and the ACT, but declining in all other states and territories.
“Declines ranged from 0.2 percentage points in South Australia and the Northern Territory to 0.6 percentage points in Victoria.”
With the Reserve Bank of Australia (RBA) deciding to maintain the official cash rate at 4.35 per cent over the June quarter, the REIA said the quarterly average standard variable interest rate remained stable at 8.8 per cent, with the quarterly average three-year fixed rate also holding steady at 6.8 per cent.
Pilkington said the total number of owner-occupier dwelling loans increased over the period to 83,599, marking an increase of 18.8 per cent over the quarter and 6.9 per cent over the past 12 months.
The total number of loans for owner-occupiers rose in all states and territories over the June quarter of 2024, with increases ranging from 9.8 per cent in South Australia to 25.9 per cent in NSW.
“Over the June quarter, the average loan size increased to $629,249, an increase of 3.6 per cent over the June quarter, and 7.9 per cent over the past 12 months,” said Pilkington.
First home buyer (FHBs) numbers rose in all states and territories, with the smallest increase seen in South Australia (9.2 per cent) and the largest in the NT (39.3 per cent).
Weighing in on the NT’s result, Pilkington flagged that “with only 290 loans to first home buyers, the Northern Territory continues to be the nation’s smallest market”.
The average loan size to FHBs increased over the quarter to $535,429, marking an increase of 2.7 per cent over the period, and 6.8 per cent over the past year.
The average loan size increased in all six states, bucking the trend of the territories, with South Australia recording the greatest increase at 4.9 per cent, and Victoria reporting the smallest at 0.6 per cent.
Pilkington said it was a positive note that “the number of first home buyers increased to 30,636, 18.6 per cent more than last quarter, and 7.2 per cent more than in the June quarter 2023”.
“First home buyers now make up 36.6 per cent of the owner-occupier dwelling commitments, a decrease of 0.1 percentage points over the quarter but an increase of 0.1 percentage points over the year,” she concluded.
