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Revealed in the Real Estate Institute of Australia’s Housing Affordability Report, the March quarter saw average monthly loan repayments fall by 2.9 per cent to $5,323.
This was caused by reduced interest rates and smaller loan amounts.
Meanwhile, there was a 2 percentage point drop in the proportion of median family income needed to meet average loan repayments to a total of 48 per cent.
Incomes are on the rise too, with the median weekly family income increasing by 1.1 per cent throughout the quarter to a total of $2,561. This was 4 per cent higher than the March quarter 2024.
There are positive signs for families as the housing market showed strong signs of recovery.
“First home buyers remain active in the market, although numbers dipped in line with seasonal expectations,” said REIA president Leanne Pilkington.
“There were 26,091 new loan commitments during the March quarter, 15.9 per cent lower than the previous quarter but 1 per cent higher than a year ago. These buyers made up 35.7 per cent of all owner-occupier dwelling loan commitments, holding steady over the quarter but down 1.1 percentage points annually.”
All areas of the country saw positive improvements to housing affordability, with the exception of the Northern Territory, which dropped by 0.5 percentage points.
NSW and the ACT saw the strongest improvement, with a 3 percentage point increase each.
The total housing affordability for each state and territory is:
- ACT (33.4 per cent)
- The NT (34.8 per cent)
- Tasmania (43.4 per cent)
- Victoria (45.2 per cent)
- South Australia (47.7 per cent)
- Western Australia (48 per cent)
- Queensland (48.4 per cent)
- NSW (56.8 per cent)
Rental affordability showed positive improvements too. For the second consecutive quarter, affordability climbed. The income required to pay median rent decreased by 0.2 percentage points to 24.5 per cent.
Broken down, the housing affordability for each state and territory was:
- ACT (18.9 per cent)
- Victoria (21.3 per cent)
- Queensland (23.5 per cent)
- Western Australia (24 per cent)
- The NT (24.5 per cent)
- South Australia (25.4 per cent)
- Tasmania (26.8 per cent)
- NSW (27.6 per cent)
NSW continues to be the least affordable state for both buyers and renters, while the ACT takes the top spot for affordability for each.
With 2025 starting strong with affordability improvements, REIA said the rest of the year could be “a more navigable path” for both buyers and renters.
[Related: Home values up, building approvals down]
