Dramatic improvement in home affordability

The latest Housing Affordability Report from the Real Estate Institute of Australia (REIA) and Deposit Power has confirmed the dramatic improvement in housing affordability that has taken place in recent months.

According to the report, the cost of buying a home improved by a record 6.4% in the December 2008 quarter, compared to the September 2008 quarter.

The percentage of family income needed to service a home loan decreased to 32.4% from 38.8% in the September 2008 quarter.

REIA president Noel Dyett said the improvement was “tremendous news for homeowners who struggled most of 2008 with rising interest rates and increasing loan repayments”.