Aussies putting their money where their house is
While national statistics show that housing affordability improved in the September quarter across the country, homeowners are still spending more than half their income to keep the ‘dream’ alive.
AUSTRALIA’S housing affordability improved slightly in the September 2025 quarter, but loan repayments remain a massive household cost.
According to the Real Estate Institute of Australia (REIA) the average loan repayment now amounts to 47 per cent of median family income.
A standard guideline is that anything above 30% is associated with financial stress.
Some regard a figure of 40-50% as “mortgage torture.” But that’s already the case in most States.
The REI’s September quarter Housing Affordability Report shows NSW is the worst, with 55.1% of median income needed to meet loan repayments.
Queensland is the next worst with 48.3%, followed by South Australia on 46.3%, Victoria 43.4%, WA 40.5%, and Tasmania 40.1%.
The most affordable areas are the ACT on 31.7% and the Northern Territory on 32%.
Rental affordability is grim too, NSW again the worst with 27.7% of income needed.
The national average was 24.3%. ACT rents were the most affordable at 18.4%
Harsh figures, but they are an improvement. The 47% average for home loans represented an annual drop of 1.6%.
“This positive trend was observed across nearly all jurisdictions,” said REI President Jacob Caine.
NSW, for example, went from 57.9% of income needed to cover repayments in September 2024, to 55.1% this latest quarter.
Analysts said the improvement in affordability could be largely attributed to the year’s three interest rate cuts.
But now rates remain on hold at 3.6% with the possibility of rises next year.
“Higher than anticipated inflation toward the end of this year has led to a significant shift in market expectations,” Caine noted.
