The national peak real estate body Real Estate Institute of Australia has released its Housing Affordability Report for the June 2023 quarter. This report provides important insights into the state of housing and rental affordability in Australia.

Here’s a summary of the key information you provided:

Economic Context: The release of the REIA HAR coincides with positive economic indicators, including CPI (Consumer Price Index) being within the Reserve Bank of Australia’s (RBA) target band, a stable cash rate at 4.1%, and sustained economic growth.

Policy Considerations: The report emphasizes the importance of evidence-based policy-making amid current challenges related to the cost of living. It mentions a campaign to introduce rent freezes and rent controls, which has faced opposition from economic arguments. The National Cabinet has chosen not to intervene in the housing market

Housing Affordability Trends: Housing affordability has declined significantly over the past two decades, with a 13.6% decrease over a 20-year period and a 12.4% decrease over the past 10 years. Rental affordability, on the other hand, has seen smaller declines, with a 1.3% decrease over 20 years, a 0.9% decrease over 10 years, and a 0.5% decrease over the past five years.

Fast Facts:

• The proportion of income needed to meet the average loan repayment increased slightly, by less than 1.0 percentage point, to 45.9% in the June 2023 quarter.
• The number of first-time homebuyers increased by 17.1% during the quarter, reaching 24,768 nationally. However, this represents a 15.0% decrease compared to the previous year.
• The proportion of income required to meet median rent increased by 0.4 percentage points to 23.4%, with an annual decline of 0.5 percentage points.

These findings indicate that while there has been some positive movement in first-time homebuyer numbers, housing affordability remains a significant concern, especially when looking at long-term trends. The report also highlights the delicate balance between addressing housing affordability challenges and avoiding market intervention.