Housing affordability deteriorated in 2010 off the back of the Reserve Bank’s four official cash rate rises, a new report has revealed.
The Real Estate Institute of Australia’s (REIA) Deposit Power Housing Affordability Report for the December quarter 2010 showed the proportion of income required to meet home loan repayments increased 0.5 per cent in the December quarter.
“The proportion of income required to meet home loan repayments increased 0.5 percentage points to 35.3 per cent, up from 34.8 per cent in September 2010,” REIA president David Airey said.
Over the year, housing affordability decreased 4.6 percentage points, he said.
New South Wales remained the least affordable state in which to own a home, with the proportion of income required to meet loan repayments increasing to 39.5 per cent – 4.2 percentage points above the national average.
“Compared to the corresponding quarter of the previous year, all states and territories recorded a decline in housing affordability - the largest decreases were evident in Victoria and New South Wales,” Mr Airey said.
The ACT remained the most affordable state or territory in which to own a home, with the proportion of income required to meet loan repayments decreasing to 18.5 per cent – 16.8 percentage points below the national average.