Housing affordability outside New South Wales (NSW) has been steadily improving for the past seven years, according to new data.
The latest Housing Affordability Report from the Real Estate Institute of Australia (REIA) and Adelaide Bank specifies that affordability in the June quarter 2016 improved to levels that have not been seen since the same period in 2009.
Median family income required to meet average loan repayments stands at 29.4 per cent - and more favourable interest rates and modest increases in income are cited as the key driving forces behind this trend.
Improvements in affordability were witnessed throughout most states and territories, with the exception of NSW and Queensland, where no change was recorded. The only quarterly decline was experienced in the Australian Capital Territory.
The greatest improvement was recorded in Victoria. Although the proportion of income required to meet average monthly loan repayments was slightly above average at 31 per cent, it decreased by 1.7 percentage points on the previous three-month period.
A positive trend was also identified in rental affordability, where the median family income required to meet median rents dropped from 25.1 per cent in the March quarter to 24.8 per cent in the second quarter of the year.
For this segment, the best improvement was found in the Northern Territory, followed by South Australia and Tasmania.
Neville Sanders, president of the REIA, said: "The lending figures show that owner-occupiers are the dominant force in the moderating market in which the growth of investor activity has abated following the introduction of macroprudential measures.
"Disappointingly the proportion of first home buyers appears to be on a downward spiral," Mr Neville continued, adding that this measure is at its lowest mark in more than 20 years.
"Western Australia has the largest proportion of first home buyers in the owner-occupier market nationally."
