Best rental affordability results since 2007: REIA

REIA president, Adrian Kelly said rental affordability had improved in both the June quarter and the past year.

“The proportion of income required to meet rent payments decreased to 23.3 per cent in the quarter, a decrease of 0.4 percentage points over the quarter and down 0.5 percentage points compared to the same time last year,” said Mr Kelly.

“This can be mainly attributed to the reduction or stabilisation of rents during the June quarter with only the Australian Capital Territory having an increase in rents.

“Rental affordability has not been this high since December 2007, a positive for renters in these COVID times.”

Mr Kelly also said the proportion of household income required to meet loan repayments decreased by 0.2 percentage points to 34.5 per cent over the quarter.

“Even though the family income only increased 0.1 percentage point during the period, the average loan repayment decreased 0.6 percentage points through a drop in the average variable standard interest rate,” said Mr Kelly.

The Report also shows the total number of new loans have declined compared both the March quarter of 2020 and the June quarter of the previous year.
“This is the lowest number of new loans issued in the past 5 years for all areas except New South Wales and the Australian Capital Territory and reflects the reduced activity in the housing market as a result of restrictions associated with COVID,” said Mr Kelly.

About the Housing Affordability Report
The quarterly Housing Affordability Report is recognised as the most authoritative indicator of Australian housing affordability. Subscribers to the Report include state and Federal Treasuries, the Reserve Bank of Australia, academic institutions, financial institutions, libraries, brokers, developers and major consultancy groups.

Queensland

Housing affordability improved in Queensland over the June quarter with the proportion of income required to meet home loan repayments decreasing to 29.7%, a decrease of 0.7 percentage points over the quarter and a decrease of 0.8 percentage points when compared to the June quarter 2019.

Rental affordability in Queensland improved over the quarter with the proportion of family income required to meet median rent decreasing to 21.5%, a decrease of 0.5 percentage points over the quarter and a decrease of 0.4 percentage points compared with the same quarter 2019.

Over the June quarter, the number of loans to first home buyers in Queensland decreased to 4,888, a decrease of 9.8% over the quarter but an increase of 6.4% compared to the same quarter of 2019.

Of all Australian first home buyers over the quarter, 18.1% were from Queensland while the proportion of first home buyers of the state’s owner-occupier market was 34.1%.

The average loan size to first home buyers increased to $376,207, an increase of 0.6% during the quarter and an increase of 10.6% compared to the June quarter 2019.

The number of loans decreased in Queensland to 14,342, a decrease of 9.9% over the quarter and an decrease of 5.4% compared to the June quarter of the previous year.

The average loan size increased to $414,426, an increase of 0.1% during the quarter and an increase of 7.6% compared to the June quarter 2019. Queensland’s average loan size is 16.0% lower than the national average.