8th August 2008: The latest in housing affordability

The Real Estate Institute of Australia March quarter index shows that on average, Victorian borrowers need 37.1% of the average family income to meet average loan repayments.
This has increased from 36.2% in December 2007 and 33.5% in March 2007.

In the past 12 months, increased interest rates are the primary reason for the fall in affordability. Though interest-rate increases were pushing repayments much higher than the rise in income level, the cost of many other goods and services was also increasing.
Prospective buyers have welcomed the return of the local property market to a more sustainable position this year. However, rising interest rates mean even though property prices have stabilised, loan repayments continue to rise. This is placing pressure on prospective homebuyers and those who have just entered the market.

– Fletchers Property Newsletter July 2008 Edition