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Affordability in New South Wales, Australia’s least affordable state, has worsened, with the proportion of income required to meet loan repayments hitting almost 40%.According to Adelaide Bank/REIA Housing Affordability Report, the proportion of income required to meet loan repayments in New South Wales increased by 1.4 percentage points in the December quarter of 2015, to 39.4%. This is now 7 percentage points above the national average.Adelaide Bank general manager Damian Percy has described this as a “national tragedy”.“The further decline in housing affordability reported in December’s Adelaide Bank/REIA Housing Affordability Report is deeply disappointing and of great concern, particularly given the current low interest rate environment,” he said.“The fact that many young families, particularly those in Melbourne and Sydney, now see home ownership as something their parents achieved but they likely never will, is a national tragedy.”The proportion of income required to meet loan repayments in Victoria rose 0.6 percentage points in the December quarter, to 34.6%.Aside from urging the government to take meaningful action to address deteriorating affordability, Percy is urging current homeowners to accept that capital gains cannot continue at the same pace as they have been.“We owners have been the beneficiaries of runaway house prices, to the detriment of potential owners; the latter group’s long term needs cannot be addressed unless the former are prepared to forgo a little of the upside they have received in the past so that first home buyer occupiers can get a leg up and some real ‘social security’.”Greater investment to grow population in regional Australia is also needed, according to Percy, to discourage urban sprawl in the East Coast capitals.Rental affordability in New South Wales recorded a slight improvement in the December quarter of 2015, falling 0.2 percentage points to 27.9%. However, rental affordability in Victoria also worsened over the quarter with the proportion of income required to meet median rents increasing by 0.5 percentage points to 23.5%.The Australian Capital Territory remained the most affordable state or territory to buy a house in the December quarter, with the proportion of income required to meet loan repayments sitting at 19.9%.