Housing affordability improved over the first quarter of 2018, while rental affordability dipped, a new report stated.
The Adelaide Bank/REIA Housing Affordability Report saw the proportion of median income required to repay the average loan decline by 0.3 per cent to 31.3 per cent over the first three months of 2018.
Housing affordability improved across the country despite falls in Victoria, South Australia and ACT during the first quarter of 2018, according to research from the Real Estate Institute of Australia and Adelaide Bank, which Darren Kasehagen, head of distribution at Adelaide Bank, said it was a welcomed sight.
Rental affordability, however saw a slight increase of 0.1 per cent up to 24.8 per cent.
Out of all the states and territories, Western Australia and the Northern Territory were the only two that saw both housing and rental affordability improve.
Here is a breakdown of how each state and territory saw housing and rental affordability change during the quarter:
New South Wales
The most populated state finally is starting to catch its breath after its recent housing affordability issues; while it’s still the most unaffordable state or territory in the country with the proportion of median income requires to repay loans decreasing by 1.5 per cent to 36.5 per cent. This is however a rise of 0.3 per cent compared to this quarter last year.
Rental affordability also saw a bit of relief over the quarter, with the income proportion needed declining by 0.4 per cent to 30.1 per cent.
The situation in Victoria became a little more unaffordable, with the median income proportion rising by 0.7 per cent over the quarter and is 1.6 per cent higher this quarter last year.
Rental affordability also took a hit with the income proportion rising by 0.2 per cent to 23.8 per cent.
Housing affordability saw a very slight improvement over the quarter with a decline in the income proportion declining by just 0.1 per cent to 27.5 per cent, but is up 0.8 per cent compared to this quarter last year.
Rental affordability worsened, with the income proportion rising by 0.4 per cent to 23.1 per cent.
Down south, things became less affordable overall, as housing affordability weakened with the income proportion rising by 0.8 per cent to 27.2 per cent for the quarter and a rise of 1 per cent compared to this quarter last year.
Rental affordability followed a similar trend, with income proportion rising 0.5 per cent over the quarter, but overall is doing better than this quarter last year, which is 0.2 per cent lower.
As mentioned previously, Western Australia was one of two states or territories where things were becoming more affordable, with income proportion declining 0.3 per cent over the quarter but is up 0.2 per cent higher compared to this quarter last year.
Rental affordability also improved, which saw the income proportion decline by 0.1 per cent.
Housing affordability improved at the southern point of the nation, as the income proportion declined 1.2 per cent to 24.5 per cent over the quarter, but rose 0.9 per cent compared to this quarter last year.
Unlike housing affordability, rental affordability worsened, with the income proportion rising 1.3 per cent to 28.1 per cent.
Like Western Australia, the Northern Territory saw overall affordability improvement. The income proportion for housing affordability declined 1.1 per cent to 19.8 per cent over the March quarter, which was also 1.3 per cent lower compared to this quarter last year.
Rental affordability also improved, as the income proportion declined by 0.6 per cent to 22.5 per cent.
Australian Capital Territory
The nation’s capital saw affordability weakened slightly, with the income proportion rising by 0.1 per cent to 19.7 per cent, which is, however, a decline of 0.4 per cent compared to this quarter last year.
Rental affordability also worsened, as the income proportion rose 0.3 per cent to 18.5 per cent.