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New figures have revealed that housing affordability declined nationwide over the September quarter – with year-on-year results indicating the rapid rise of housing affordability during 2015.
According to the Adelaide Bank/Real Estate Institute of Australia (REIA) Housing Affordability Report, the proportion of median family income required to meet average loan repayments now stands at 31.7 per cent.
This is a 1.4 per cent increase for the quarter and up 1.3 percentage points compared to 12 months ago.
Adelaide Bank general manager Damian Percy said the REIA attributed the decline largely to the increasing size of loans with NSW, which had an average loan size of more than $400,000, approaching $415,000.
“First home buyers in NSW are now borrowing 16.7 per cent more than in September 2014,” he said.
“This quarter also sees Victoria beginning to push up against the $400,000 mark.”
The news wasn't quite so bad for other parts of the country, with affordability either improving or remaining stable.
“The Australian Capital Territory retained its crown of most affordable relative to income for the September quarter, along with an improvement in Western Australia,” according to Mr Percy.
“Tasmania was relatively stable with affordability declining in all other states.”
Nationwide the average loan size increased 3.8 per cent to $347,367 for the quarter and by 9 per cent compared to the corresponding period last year.
Meanwhile, the report also found that NSW, Victoria, Queensland, South Australia and the Northern Territory recorded an increase in the number of first home buyer loans over the September quarter. However, nationally first home buyers show a 2.2 per cent decrease year-on-year.
Affordability refers to a product or service that is inexpensive and accessible for people with limited means.
Housing affordability refers to the cost of housing that is relative to the disposable income of a renter or buyer.