Australians in five states need to set aside at least 31% of their monthly income to afford mortgage repayments.
Real Estate Institute of Australia’s latest housing report showed that housing affordability declined over the last quarter of 2021, with households across the country needing to allocate 37% of their income, on average, to service their home loans.
Western Australia, the Australian Capital Territory, and the Northern Territory are the most affordable housing markets in the country, as homeowners in these state and territories need around 26% of their income to make monthly mortgage repayments.
|
State |
Share of income needed to afford mortgage repayments (%) |
|
NSW |
46.5 |
|
Vic |
37.3 |
|
Qld |
33.4 |
|
SA |
31.3 |
|
Tas |
33.3 |
|
WA |
26.2 |
|
NT |
25.1 |
|
ACT |
27.5 |
Western Australia overtook the ACT in terms of affordability despite recording a marginal increase in the share of income required to service mortgages.
The share of first-home buyers in the overall owner-occupier market also speaks to the state’s affordability — 39.3% of owner-occupiers are first-time buyers.
Real Estate Institute of Western Australia president Damian Collins said the state remains relatively affordable compared to other states even with its stable price growth.
“While in other parts of the country the dream of home ownership is out of reach for many people, particularly in places like New South Wales where close to half of the state’s median weekly family income is required to service loan repayments, that is simply not the case in Western Australia,” he said.
Dwelling values increased by 0.4% in Perth and 2.5% in Regional Western Australia over the December quarter, according to CoreLogic.
During the period, Perth had the second lowest median dwelling price at $528,551 while Regional Western Australia had the lowest among all regional markets at $388,894.
Average loan size growing
The number of first-home buyers decreased to 37,620 during the last quarter of 2021.
The first-timer segment made up 34.1% of all owner-occupier finance commitments during the period, down from 41.9% a year ago.
Average loan sizes to first-home buyers increased in all states and territories except Tasmania.
Over the quarter, first-home buyers took out home loans amounting to an average of $470,548.
Meanwhile, the total number of owner-occupier financing commitments increased quarterly and annually.
The average loan size for the owner-occupier segment increased, up by 3.5% quarterly and 17.7% annually to $590,482 — this reflects the biggest annual increase since 2002.
—
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