According to the Real Estate Institute of Australia (REIA) Housing Affordability Report for the December 2019 quarter, affordability declined by 2%.

This is after the three rate cuts occurring in June, July and October of 2019. 

To put that into perspective, this means the proportion of income required to meet home loan repayments has increased to 34.7%.

Housing affordability worsened across the country, with the exception of quiet achiever the Northern Territory, where affordability improved. 

"It's still very difficult for first home buyers," REIA president Adrian Kelly told 7.30.

"It's very difficult for them to access all of that large amount of money at the one time."

Thinking about refinancing to a low-rate, variable owner-occupier home loan? Below are a handful of low-rate loans on the market. 

Update resultsUpdate
LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkCompare
6.04% p.a.
6.06% p.a.
Principal & Interest
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5.99% p.a.
5.90% p.a.
Principal & Interest
Featured Apply In Minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

New South Wales housing affordability

New South Wales remains the least affordable state in Australia to buy a home.

Housing affordability declined by 3% over the December quarter, with borrowers needing to devote almost half of their income (42.8%) to meet their home loan repayments.

That's 8.1% higher than the national average. 

With Sydney's median house price expected to surge by $100,000 this year, those figures are likely to get worse. 

Despite housing affordability worsening in New South Wales, the number of loans to first home buyers spiked by 5.6% over the quarter. 

Sydney also remains the most expensive city to rent, with a median rent of $574 per week.

While that sounds expensive, it's actually cheaper than it was a year ago when the median rent was $582 per week. 

Victoria housing affordability

Borrowers in Victoria will need to devote 36.5% of their income towards home loan repayments, an increase of 1.9% over the quarter. 

The number of loans to first home buyers in Victoria increased by 14.1% over the quarter and a big 18% increase compared to the previous December quarter.

According to the report, first home buyers make up 40% of the state's owner-occupier market while the average first home buyer loan was $426,308 - a 10% increase from the December 2018 quarter. 

Melbourne's median house price is tipped to soar by 8% this year and a further 3-5% in 2021.

If those forecasts pan out, Melbourne's median house price will hit the $1 million mark in 2021. 

Queensland housing affordability

Queenslanders with a mortgage will need to set aside just over 30% of their income to meet their home loan repayments, an increase of 1% over the quarter.

First homer buyers are rife in the sunshine state, with an 8.1% increase in loans made to first home buyers. The average loan size for a first home buyer was just over $361,000.

Rental affordability was also down for the December quarter, with households needing to devote 22.1% of their incomes to make the median rent of $440 per week. 

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