The consecutive rate increases since May have worsened housing affordability among mortgage borrowers.

According to the Real Estate Institute of Australia, the share of income needed to meet the average loan repayment increased over the September quarter to 42.2%.

The quarter already accounted all the rate increases since May, which bring the cash rate to 2.35% in September.

REIA President Hayden Groves said housing affordability declined in all states and territories.

“Tasmania had the highest decline with the proportion of income increasing 5.9 percentage points and Western Australia having the lowest decline with the proportion of income increasing 3.2 percentage points,” he said.

Relative to housing affordability, rental affordability declined at a slower rate, with the proportion of income needed to afford median rent increasing by only 0.1 percentage point to 23%.

Here's a comparison of the share of income needed to afford loan repayments and rents in each state and territory:


Share of income needed (%)

Mortgage Repayments


New South Wales

51.6 ($2,303)



43.6 ($2,280)



38.6 ($2,165)


South Australia

36.9 ($2,023)


Western Australia

31.4 ($2,379)



40.2 ($1,834)


Northern Territory

31.1 ($2,308)


Australian Capital Territory

31.7 ($3,019)


First-home buyers are retreating

The number of first-home buyers decreased to 26,343 during the quarter.

Overall, they make up 30.9% of owner-occupier dwelling commitments in the period, a decrease of 0.1 percentage points over the quarter and a fall of 4.2 percentage points annually.

All jurisdictions, except Tasmania and Northern Territory, reported a decline in first-home buyers.

During the quarter, the total number of owner-occupied dwelling loans decreased to 85,122, representing a 9.4% quarterly and 21% annual declines.

The annual decline in owner-occupied dwelling is the highest annual decrease in new loans since December 2010.

Interestingly, the average loan size also shrank in the quarter, down to $595,566. This is the first quarterly decline in average loan size since September 2020.

On an annual basis, however, the average loan size represented an increase of 4.4%.


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