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SYDNEY - Home affordability in Australia is at its lowest level in 22 years, with more than a third of a family's income needed to make average mortgage repayments, the Real Estate Institute of Australia (REIA) says.
The Deposit Power/REIA Affordability report for the September quarter found 36.6
per cent of household income was needed to cover average home loan repayments.
Affordability dropped in every state and territory, except Tasmania, with a 2.2 per cent decline in the quarter and 8.1 per cent over the previous 12 months.
New South Wales was the most expensive state with 38.3 per cent of a household's income needed to meet average repayments, as affordability fell 0.8 per cent in the quarter and 5.4 per cent over the year.
The Australian Capital Territory had the lowest amount of family income, 20.7 per cent, needed to pay a loan, despite affordability falling one per cent in the quarter and 8.3 per cent over the year.
The proportion of family income needed to meet home loan repayments is calculated on the median family income, the average home loan size and the average variable interest rate over the September quarter.
With a central bank interest rate rise this month and with more increases expected, home affordability is likely drop in the near future, REIA president Noel Dyett said.
"Purchasing a home has never been more difficult in the past 22 years," Mr Dyett said in a statement.
Both major parties have during the federal election campaign announced plans to address the housing affordability crisis, but any results would not be seen for a while, Mr Dyett said.
"Whichever party is elected to Government this weekend must heed the danger signals inherent in an economy where people are increasingly stretched financially to meet housing costs," he said.
Benefits of schemes such as home savings and land release programs will only appear in the longer term, he said.
"However, it appears that little to be done to ease the immediate problems, which are getting worse."
The REIA institute's survey comes out on the same day as new research is released showing Australia is in a better economic position than New Zealand.
A BNZ report says there are many similarities between the New Zealand and Australian economies, including low unemployment and rising inflation. It also reveals commodity price drives both economies.
BNZ head of research Stephen Toplis says Australia's economy is being pushed by a rapidly growing housing market, while New Zealand's market is losing steam, from the impact of a long period of interest rate increases.
Mr Toplis says New Zealand home owners should expect interest rates to continue to rise.
- AAP, NEWSTALK ZB
