‘Last week, the Deposit Power/REIA Housing Affordability Report published data showing that home loan affordability was at an all-time low, with 38% of median weekly family income required to meet loan repayments on new home loans,’ says Noel Dyett, President of the Real Estate Institute of Australia.
‘It will be with much relief that these new borrowers, and a good number of existing borrowers, greet the news that official interest rates will remain unchanged for the moment, because many are already stretched to the limit, particularly at a time when fuel and food costs are also rising significantly.
‘House prices have softened considerably in most Australian cities since the start of 2008. Lending data shows that new borrowings by both investors and owner occupiers have also fallen substantially. Hardest hit have been first home buyers, whose numbers reduced by 17.5% nationally during the March quarter 2008.
‘The recent interest rate increases, both the official increase and the additional increases implemented by many lenders, are already having a significant effect on the housing market. People still need homes to live in, however, and buyers and renters alike suffer as the cost of housing finance increases.
‘While we understand the need to get inflation under control, the REIA urges the Reserve Bank to act with caution in the months ahead,’ says Noel Dyett.