Home Repayments Dip Below Quarter Of Average Income

Home-loan repayments have dropped to less than a quarter of the average family income across Australia for the first time in more than six years, according to an industry survey.

The survey, by the Real Estate Institute of Australia and the mortgage insurer MGICA found that home loans were at their most affordable since the housing finance market was deregulated in April, 1986.

In Victoria, the ratio of average monthly loan repayments to median family income fell by 1.3 percentage points to 22.9 per cent in the June quarter. This was the best result in Victoria since March 1986. The average monthly loan repayment in Victoria during the quarter was $719 compared with $764 in March.

Nationally, the ratio of average monthly loan repayments to median family income fell by 0.9 percentage points to 24.3 per cent. The national average monthly loan repayment was $741 compared with $774 in March.

Home-loan repayments were still the highest in New South Wales. The average monthly loan repayment in the June quarter was $886 compared with $913 in March. The Northern Territory had the most affordable housing with an average monthly repayment of $660 or 15.1 per cent of the median family income.

South Australia had the biggest improvement in affordability over the quarter with a fall of 1.8 percentage points. Other falls were in Tasmania (1.5 percentage points), Victoria (1.3), Queensland (1), New South Wales (0.8), ACT (0.6), Western Australia (0.5) and the Northern territory (0.1) The institute's chief executive officer, Mr Phil Roberts, said home-loan affordability had improved during the past four quarters because of lower interst rates and steady house prices.

``The June quarter figure should dispel any lingering doubts about the sustainability of improved home loan affordability," Mr Roberts said.