New analysis reveals that national housing affordability has improved during the June quarter this year.
The Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report for the quarter shows the proportion of income required to meet loan repayments has decreased by 0.5 per cent to record a 30.3 per cent result Australia-wide.
This result is also 0.6 per cent lower than the figure recorded for the June quarter 2014.
According to the report South Australia recorded the greatest improvement in affordability at 25.5 per cent of household income.
Damian Percy, a general manager at Adelaide Bank, says there is a narrowing cost difference between renting and buying in SA.
“In fact, in terms of the proportion of family income required to meet loan repayments, SA now has the narrowest gap between buying and renting of all the mainland states.
“There is now just a 2.1 per cent difference.”
The least affordable state would come as no surprise to most observers.
“Year on year, the biggest increase in the average loan size was recorded in New South Wales, which retained the crown of the least affordable state.”
Percy believes the result reflects a combination of factors.
“The improvement in housing affordability is attributable to the rise in the national median weekly family income and a drop in interest rates.”
According to the report, the national median weekly family income increased by 0.4 per cent to $1,622 per fortnight for the period.
“The cut in official interest rates during the second quarter of 2015 resulted in an average monthly loan repayment of $2,128,” Percy says.