In what will no doubt come as positive news for local brokers – particularly those with a large proportion of first home buyers in their client base – Queensland recorded the largest improvement in housing affordability in the country over the June quarter, according to the Adelaide Bank/REIA Housing Affordability Report.
The proportion of income required to meet home loan repayments decreased 1.9 percentage points during the June quarter to 26%, down 4.5 percentage points from the June quarter, 2012.
“Our State’s improvement in rental affordability was also the best across Australia,” says REIQ chairman Pamela Bennett. “The proportion of income required to meet median rents dropped 1.1 percentage points to 21.4%. Compared to the June 2012 quarter, the proportion fell by 1.2 percentage points…The report shows that housing affordability has now been improving for the past two years, with the proportion of income required to meet repayments at its lowest in a decade.”
New South Wales remains the least affordable with the proportion of income required to meet loan repayments 5.6 percentage points higher than the nation’s average, followed by South Australia.
“According to the report, affordability is improved in all states and territories when compared to the same time last year and no doubt the seven interest rate cuts since November 2011 have played a significant role,” says Bennett.
However, first home buyers continued to lag behind, making up just 14.6% of the owner-occupier market nation-wide, a persistently low number compared to the average proportion of 20%.
Victoria had the largest jump in the number of loans to first home buyers over the quarter and Western Australia the largest over the year.
Australia-wide rental affordability improved with the proportion of income required to meet rent payments decreasing slightly to 23.7%.
But Bennett says believes it’s no time for the property industry to grow complacent.
“With the election now behind us, interest rates reduced, and sales volumes rising, it is likely that housing affordability will not stay this low for long.”