Breathing room for buyers and renters

Australia's housing market saw a shift in momentum over the March quarter 2025, with affordability showing its first signs of relief in over a year, according to the latest Real Estate Institute of Australia (REIA) Housing Affordability Report.

REIA's recent data shows that the proportion of median family income needed to meet average loan repayments fell to 48 per cent, improving by 2 percentage points over the quarter.

REIA President Leanne Pilkington said the result marks the biggest quarterly improvement in housing affordability since the March quarter 2016.

"The report attributes this improvement to a combination of rising incomes and easing repayment levels", she added.

National median weekly family income increased by 1.1 per cent over the quarter and 4.0 per cent year-on-year, reaching $2,561. At the same time, average monthly loan repayments dropped by 2.9 per cent to $5,323 – a result of both reduced interest rates and smaller loan amounts.

"All states and territories saw housing affordability gains, with the exception of the Northern Territory, where affordability slipped by 0.5 percentage points", Pilkington noted.

"Tasmania recorded the smallest improvement (0.1 percentage points), while New South Wales and the Australian Capital Territory led the way with a 3.0 percentage point gain."

Rental affordability also nudged upward for the second straight quarter. The national proportion of income required to pay median rent decreased by 0.2 percentage points to 24.5 per cent.

New South Wales and Western Australia recorded the greatest improvements in rental affordability, while conditions deteriorated in Queensland, Tasmania, and the Northern Territory.

While the improvement offers welcome relief, Pilkington believes sustained interest rate settings and wage growth will be key to maintaining this positive momentum.

"With economic conditions easing and cost pressures beginning to stabilise, both aspiring homeowners and renters may find 2025 a more navigable path forward – for now", she concluded.