Housing affordability has been improving over the past year and a half, with the proportion of income required to meet loan repayments sitting at its lowest point since the December quarter, 2009, according to the REIA-Adelaide Bank Housing Affordability Report.
The rise in affordability has led to a stirring of interest for first home buyers in SA, WA, Tasmania and NT and Adelaide Bank general manager Damian Percy said his conversations with the bank’s broker network also reveal that inquiries are on the increase nationally for people wanting to upgrade their home. This in turn is generating interest in some of the less restrictive ‘bridging style’ finance options, he said.
“The somewhat limited availability of these types of financing solutions has seen mortgage brokers looking for tight turnaround times, particularly in the more active property markets and for higher end property which is again starting to generate interest from buyers.”
Percy, said the overall results demonstrated another ‘welcome improvement’ in housing affordability.
“All Australian States recorded an improvement with Queensland and my home State of South Australia leading the way – both now 3.5% better - in terms of affordability since the December quarter a year ago.”
REIA president Peter Bushby said rising incomes and declining mortgage payments as a result of rate cuts had resulted in the improving level of affordability. But Bushby indicated that the news wasn't entirely positive, as states where first homebuyer schemes had been wound back had seen a massive drop-off in FHB participation.
"Nationally, the December quarter recorded the proportion of FHB in the total number of housing finance commitments at its lowest since the March quarter 2005," he said.