Affordability improving: REIA

Housing affordability pressures are starting to ease, the Real Estate Institute of Australia (REIA) announced this week, citing official lending figures.

Recent data from the Australian Bureau of Statistics (ABS) shows new loan commitments for dwellings increased by 1.9 per cent over the quarter, with values rising 2 per cent. Owner-occupier loans rose 0.9 per cent in number and 2.4 per cent in value, while first home buyer lending increased by 1.7 per cent with values up 5.7 per cent. Investor lending also grew, with commitments up 3.5 per cent and loan values rising 1.4 per cent.

REIA President Leanne Pilkington suggested that after a prolonged period of affordability challenges, the figures indicate that some relief may be filtering through to the market.

“The growth in new loans, particularly among first homebuyers, signals better access to finance and a cautious return of confidence”, she said, adding that investor activity remains critical.

“Investors play a vital role in providing rental housing, and the rise in investor lending is a positive indicator for rental market stability, which is essential as Australia faces ongoing housing supply pressures.”

Pilkington believes the ABS data also shows a substantial increase in refinanced loans among owner occupiers, indicating borrowers are actively seeking to improve their mortgage conditions amid favourable interest rate conditions.

“Refinancing activity suggests that many Australians are finding ways to better manage their mortgages, which may help to ease some cost of living pressure,” she noted, cautioning that while these lending trends are encouraging, housing affordability remains a significant challenge for many Australians.

“Continued targeted policies to support first home buyers and investors are essential to maintain this positive momentum and ensure the market remains accessible and affordable.

“REIA continues to advocate for initiatives that improve housing affordability and encourage sustainable growth across the housing market”, she concluded.