Home loans market shrinks

The number of home loans granted during the third quarter slumped 27 per cent, new stats show.

However, while it may be getting more difficult to get hold of a home loan, the Real Estate Institute of Australia’s (REIA) Housing Affordability report showed that for those that do, housing is getting cheaper.

Following the government assistance made available to first-home buyers and a swift volley of attacks on the base rate, the group pointed out that the proportion of family income necessary to make home loan repayments fell by 0.7 per cent.

So too, it noted that this figure may fall further with the introduction of more low-interest home loans in the coming months.

And REIA president Noel Dyett insisted that cheaper home loans are a key signpost on the road to economic recovery.

"Home ownership is the key to, and underpins, both the personal wealth and lifestyles of the majority of Australians. Issues of housing affordability affect both existing homeowners and those contemplating home ownership,” he said.

Late last month, the group called for a holistic approach to tackle high house prices and offered its support for the new National Rental Affordability Scheme, which aims to ease the strain on renters.ADNFCR-1761-ID-18906080-ADNFCR