Rising mortgage repayments and rents push housing costs higher, making homeownership harder for Australians
Housing affordability in Australia fell to its lowest level on record during the September quarter of 2024, according to the Real Estate Institute of Australia (REIA).
REIA’s latest Housing Affordability Report (HAR) revealed that the proportion of median family income needed to meet average loan repayments rose to 48.6%, up 0.4 percentage points from the previous quarter.
REIA president Leanne Pilkington (pictured above) said the latest figures reflect worsening conditions across most states and territories, with the Australian Capital Territory (ACT) recording the sharpest decline in affordability, down 1.4 percentage points. Modest improvements were noted only in Tasmania and the Northern Territory.
“These figures highlight the persistent challenges facing Australian families, whether they’re trying to enter the housing market or manage their existing commitments,” Pilkington said. “Rising mortgage sizes, coupled with stagnant variable interest rates, continue to make homeownership less attainable.”
The report also pointed to a decline in rental affordability, with the proportion of income required to cover median rents increasing to 24.9%. New South Wales experienced the largest drop in rental affordability, down one percentage point, while Victoria and Queensland saw slight improvements.
First-home buyers faced mixed conditions. The number of new loan commitments fell by 3.9% compared to the previous quarter but remained 9.4% higher than the same time last year. However, the average loan size for first-home buyers increased 0.8% over the quarter to $536,561, marking a 6.7% rise year-on-year.
Queensland saw the largest increase in average loan sizes for first-home buyers, up 3%. In contrast, declines were recorded in New South Wales, Tasmania, and the ACT.
The Reserve Bank of Australia’s decision to hold the cash rate steady at 4.35% did little to ease affordability pressures. While the quarterly average three-year fixed interest rate dropped slightly by 0.5 percentage points to 6.3%, the standard variable interest rate remained unchanged at 8.8%.
“The data underscores the need for targeted measures to increase housing supply and improve affordability,” Pilkington said. Without meaningful intervention, homeownership will remain out of reach for many Australians.”
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