 Housing affordability improves
Housing affordability may have eased slightly in the September quarter, but the average home owner still spends 38.8 per cent of their income on mortgage payments. In the previous quarter that figure was 39.5 per cent. Mortgage stress is defined as spending more than 30 per cent of income on mortgage repayments.
The figures, from The Real Estate Institute of Australia Housing Affordability report, show that housing affordability has improved since the last quarter but is still up by 2% over the year to September.
“I think we’re starting to see the impact of interest rate reductions come through, and as they continue to come through we would expect to see housing affordability improve,” REIA president Noel Dyett told news.com.au.
"Once you get over that 30 per cent ... it is very difficult for people to be able to afford housing," Mr Dyett said.
"Hopefully these early signs of an improvement in housing affordability will start to lead to a trend we're we'll see further reductions in those costs."
The aggressive rate cuts have given some relief to home owners, and a boost to the first home buyer grant has helped many first home buyers to get into a housing market that had previously been unaffordable.
NSW is the least affordable state to own a home in, with more than 41 per cent of income needed to service a mortgage. ACT is most affordable, with homeowners paying around 21 per cent of their income.
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