Housing affordability has seen a slight improvement, but the REIA has claimed affordability still constitutes a significant hurdle for homebuyers.

"This is good news but not good enough to get excited about. What needs to be highlighted is that the reduction in the proportion of family income required to meet loan repayments is explained by a decline in the average monthly loan repayment of 1.9% and an increase of 1.2% in the median family income over the March quarter," REIA president David Airey said.

The REIA Deposit Power Housing Affordability report has shown a 1.1% improvement over the March quarter, but Airey said first home buyers still show hesitance to enter the market. The number of loans to first time buyers has declined over the quarter, falling to its lowest quarterly level since September 1994.

"The slight improvement in affordability over the quarter is positive, but a lot more needs to be done to make owning a home in Australia achievable," Airey said.

Airey commented that the total number of home loans has also continued its downward trend, and has reached its lowest quarterly level since March 1999. Deposit Power national manager Keith Levy said the uptick in affordability has done little to increase consumer confidence and move people into the market.

"Confidence in the sector is waning with reports that new home sales are down on last year and average prices are falling in some areas. Australian households are clearly vulnerable to interest rate rises, and this has been demonstrated by low housing affordability statistics, despite the marginal improvements in the quarter," Levy said.