Real Estate Institute of Australia’s (REIA) President, Adrian Kelly, said that the decline in affordability was largely attributable to higher house prices and larger loans.
“The market defied the doomsday predictions with median house prices rising across the country in 2020, with demand driven mostly from first home buyers,” he said.
“First home buyers increased their market share by 50.4 percent over 2020, motivated by low interest rates and the range of first-home buyer incentives on offer.
“Seeing this trend in conversion to home ownership, is particularly great news given the challenges many tenants and investors faced over the pandemic, however surging house prices could see housing affordability obliterated unless measures to improve supply are implemented.”
The proportion of income required to meet loan repayments increased to 34.8 or 0.9 percentage points across the country, while NSW is the least affordable state, with 44.6 per cent of incomes required to meet loan repayments.
Mr Kelly said rental affordability over the quarter declined, with the proportion of income required to meet rent payments increasing to 24 per cent.
Rental affordability declined by 0.2 percentage points over the quarter but increase of 0.4 percentage points over the past 12 months nationally.
