Financial comparison website ratecity says housing affordability is now back at the same level it was in March 2010. It’s latest first home buyer index, which measures how hard it is for first home buyers to enter the market, fell by nine points to 114 in the 12 months to July.
The result, which is based on factors including household income, loan size and mortgage repayments, was the biggest fall since the index launched three years ago.
“For the first time since we began this index three years ago, we haven’t seen the first home buyer market improve so dramatically in a 12-month period,” spokeswoman Michelle Hutchison said in a statement on Saturday.
“Interest rates are down, property values and the national average first home loan size are flat.
“There’s been so much focus and concern around the lower numbers of first home buyers but we’ve found that the proportion out of all loans financed is back to pre-global financial crisis levels.”
Victoria experienced the biggest improvement in affordability, falling 12 points, followed by Tasmania and South Australia which each dropping 11 points.
However Victoria, along with the Northern Territory, remains the toughest state for first home buyers to enter the market.