Affordability declined in some parts of Australia in the early months of this year, new research has revealed.
The latest Real Estate Institute of Australia (REIA) housing affordability report shows a decline over the March quarter 2022, with the proportion of income required to meet loan repayments lifting to 37.3%, an increase of 0.2 percentage points.
Affordability improved in New South Wales and Northern Territory, remained stable in the ACT but declined in all other states.
Renting became even less affordable, with the proportion of income required to meet median rent increasing by 0.5 percentage points to 23.5%. Rental affordability declined in all states and territories except the Northern Territory.
The number of first homebuyers fell 22.5% during the March quarter, to be down 33.9% over the past twelve months. First time buyers now make up 31.6% of owner-occupier lending, a decrease of 2.7% over the quarter and 8.7% over the year.
REIA President Hayden Groves says that while the Reserve Bank’s announcement of further interest rate hikes could see further declines in housing affordability, rates remain historically low and the hikes will hopefully help slow rising inflation.
