Mortgage burden eases in Victoria and WA

There has been some reprieve for families in Western Australia and Victoria, with the percentage of income required to pay off their mortgages bucking the national trend and decreasing marginally over the June quarter.

The proportion of family income devoted to meeting average loan repayments in Victoria eased by 0.7% over the quarter from 35.9% to 35.2%, according to the latest REIA/Deposit Power Housing Affordability Report. 

Over the quarter, Victorian median weekly earnings increased by $18 while median mortgage repayments fell by $15 as the average loan size decreased from $315,000 to $312,000. 

In WA, the resources boom appears to be helping to ease housing affordability with weekly income rising by $50 a week compared with a $43 increase in median mortgage repayments. The average size of a WA mortgage increased from $299,000 to $304,000. 

The Northern Territory was the only other state or territory market where housing affordability improved, with the percentage of income required for mortgage repayments declining from 23.2% to 22.8% as the average loan size fell from $291,000 to $288,000. 

Nationally, housing affordability deteriorated once again in the June quarter, with mortgage repayments as percentage of family income increasing 0.4% to 34.6%, taking affordability back to levels last seen 12 months ago. It followed a 1.1% “short-lived” reprieve in the March quarter. 

State by state round-up 

• NSW maintained its 15-year history as Australia’s least affordable state or territory in which to buy a home in Australia.  It recorded the largest decline in housing affordability in the June quarter, with the proportion of income required to meet loan repayments increasing 1.5% to 38.7%. 

• South Australia is the third least affordable state or territory in which to buy a home. Housing affordability deteriorated over the June quarter, with the proportion of income required to meet monthly loan repayments increasing 0.4% to 34.5%. 

• In Queensland housing affordability deteriorated slightly over the quarter. The proportion of income required to meet loan repayments increased 0.1 percentage point to 33.0%. Over the year, the proportion of family income required to meet loan repayments decreased 1.1 percentage points. 

• Tasmania recorded the second largest declined in housing affordability over the quarter. The proportion of income required to meet home loan repayments increased 1.3% to 29.5%. 

• Despite housing affordability declining in the Australian Capital Territory over the quarter, the territory remains the most affordable state or territory in which to buy a home; a position held for more than five years. Over the June quarter, the proportion of income to meet home loan repayments increased 0.2 percentage points to 18.8%.