Home buyers feel pinch as affordability slides

Housing affordability has declined for the third consecutive quarter, a new report from the Real Estate Institute of Australia has found. The Real Estate Institute of Australia’s Deposit Power Housing Affordability Report has found that higher interest rates and higher median house prices are underpinning the continued increases in average home loan repayments.

The proportion of income required to meet home loan repayments across Australia has increased from 29% in the September 2009 quarter, to 30.7% in the December 2009 quarter.

The ACT remains the most affordable state or territory in which to own a home, where the proportion of income required to meet home loan repayments increased to 17.7%. NSW is the least affordable state or territory in which to own a home, where the proportion of income required to meet home loan repayments increased to 33.6% – 2.9 percentage points above the national average.