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Housing affordability improves to best levels since 2013


1/06/2016

The March quarter edition of the Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report shows an improvement in housing affordability nationally with the proportion of median family income required to meet average loan repayments now standing at 30 per cent, a decrease of 2.4% percentage points.  Compared to the corresponding quarter of 2015, the figure decreased by 0.8 percentage points.

The report found that national median weekly family income increased by 0.5 per cent to $1,652 during the March quarter of 2015. This represents a 2.3 per cent rise when compared to the same quarter of 2015.  

The average monthly loan repayment was $2,144 a 7.0 per cent decrease over the quarter but an increase of 0.7 per cent when compared to the corresponding quarter of 2015.

Damian Percy, General Manager, Adelaide Bank said:  "When compared to the previous quarter, all states and territories saw improvements in housing affordability with the exception of the Northern Territory, where the proportion of income required to meet loan repayments increased by 0.7 percentage points.  The decrease in the national figure to 30 per cent is to be welcomed as this is now on the borderline of what has traditionally been viewed as the measure of 'housing stress'.  Victoria recorded the biggest annual increase across the nation in terms of the number of new loans.

"New South Wales recorded the biggest improvement in housing affordability with the proportion of income required to meet loan repayments decreasing by 4.0 percentage points, to 35.4 per cent, however, NSW still holds the dubious honour of remaining the least affordable state for homebuyers. Despite New South Wales recording the largest quarterly decrease in the average loan size to first home buyers, the proportion of income required to meet loan repayments in NSW is still 5.4 per cent above the national average.

"Nationally, the number of first home buyers has decreased by 16.0 per cent to 22,640.  Year on year, this is a decrease of 2.4 per cent with first home buyers now making up 14.6 per cent of the owner-occupier market, the lowest since the June quarter of 2004.  Western Australia has the highest proportion of first home buyers on the owner-occupier market nationally.

"Tasmania was notable in that the number of first home buyers increased by 6.6% over the March quarter the only increase across the country. In further good news for Tasmanians, the First Home Owners Grant in that state which applies to the construction of new homes has recently been doubled to $20,000 until 30 June 2017, which should further stimulate housing construction.   Tasmania and the Northern Territory are also notable in that the proportion of family income devoted to meeting average loan repayments is less than the proportion of family income devoted to meeting median rents.

"Over the quarter, the average loan size to first home buyers decreased in every state and territory except for Tasmania where an 8.1% increase was recorded.

Rental Affordability

"Rental affordability declined nationally in the March quarter with the proportion of income required to meet rent payments for three-bedroom houses rising by 0.5 percentage points to 25.1%. This figure remained unchanged compared to the same quarter of 2015. 

"Wherever you decide to live, Adelaide Bank's continuing and widely recognised contribution to improving housing affordability is to keep the cost of lending as low as we can, while providing great service through Australia's growing network of mortgage brokers."

"Check out www.adelaidebank.com.au to see how we can help you or someone you know realise their property ownership dream sooner.", Mr Percy concluded.