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Homeowners are facing the worst housing affordability since 2008, as mortgage repayments eat a huge chunk of their income.

The latest affordability report from the Real Estate Institute of Australia (REIA) showed that the proportion of income required to meet the average loan repayment in the country increased to 44.9% over the March 2023 quarter, the highest since September 2008.

REIA president Hayden Groves said during the quarter, the Reserve Bank of Australia had already increased the cash rate to 3.6%, and the succeeding hikes that brought the cash rate to its current level at 4.10% would likely erode affordability further.

“Affordability has declined in all states and territories except Tasmania and the Northern Territory,” he said.

South Australia suffered the worst decline over the quarter. It joined New South Wales and Victoria as the markets with the worst housing affordability result in the period.

“To put this in perspective, nationally the average loan repayment increased to $4,537 over the March quarter, which is a whopping increase of 35% over the past 12 months — this will, of course, be starker in cities where it is more expensive to buy, and bigger loans are needed.

The REIA report showed that the number of first-home buyers decreased in all states and territories, down to 21,150, representing a 17.9% quarterly and 27.3% annual declines.

Over the period, first-home buyers made up 31.4% of the owner-occupier dwelling commitments.

Mr Groves said a “calm and sensible decision-making” is needed when it comes to housing policy and easing the affordability woes.

“State and federal decision makers would be wise to look at the evidence presented by the Housing Affordability Report, not jump at shadows by looking at draconian and nonsensical measures like rent controls and rent caps,” he said.

“Decision makers should focus on the task at hand to solve the current supply crisis by looking at policies to better use the homes we have already built, and building more houses.”

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

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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.
$2,408
Principal & Interest
Variable
$0
$530
70%
 Featured Online ExclusiveUp to $4k cashback
  • Immediate cashback upon settlement
  • $2000 for loans up to $700,000
  • $4000 for loans over $700,000
5.99% p.a.
5.90% p.a.
$2,396
Principal & Interest
Variable
$0
$0
80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
6.14% p.a.
6.16% p.a.
$2,434
Principal & Interest
Variable
$0
$250
60%
  • Find out your loan eligibility in 2 minutes or less
  • Complete your application in less than 20 minutes
  • Low fees and fast approval times
5.95% p.a.
5.95% p.a.
$2,385
Principal & Interest
Variable
$0
$0
90%
5.94% p.a.
5.95% p.a.
$2,383
Principal & Interest
Variable
$0
$0
90%
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 .

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