Decreased housing affordability to affect retirement
Becoming a home owner in Australia is even more of a distant dream with a drop in housing affordability, according to reports by Adelaide Bank and Real Estate Institute of Australia (REIA).
The December quarter report found that the proportion of family income required to meet loan repayments increased by 1.1 percentage points to 31.5 per cent.
Adelaide Bank general manager, Damian Percy, said that development of public policy could help ease the supply side problems that were currently putting pressure on housing affordability.
Commenting on arising future issues Percy said that there would be negative longer term outcomes such as retirement savings adequacy.
"Quarterly studies such as the ASFA (Association of Superannuation Funds of Australia) Retirement Standard assume that people own their own homes when calculating the amount needed each week for a comfortable life in retirement," Percy said.
Reports by ASFA has found that single retirees will need $430,000 in retirement savings and couples will need $500,000.
The affordability report found the ACT was the most affordable state or territory for home buyers, and NSW was the least affordable with an average loan size above $400,000.
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