Certain regions of Australia have seen improvements in housing affordability during the first quarter of 2016, thanks to a decline in median prices.
Overall housing affordability in Australia improved by 2.7% during the March quarter, while prices are 0.4% better than the same period last year. Sydney saw the biggest improvement of 8.9%, followed by Perth at 4.9% and Darwin at 4.4%.
However, affordability was down in some Australian states, with Brisbane housing affordability falling by 1.2%, Canberra by 0.3% and Adelaide by 0.2%.
The general improvement in affordability can be put down to the fall in the national median dwelling price over 2016’s first quarter, as well as a slight increase in earnings.
Commenting on the report, Otto Dargan, managing director of Home Loan Experts in Sydney, reiterated that affordability in New South Wales remains a significant problem despite the encouraging figures.
He told Australian Broker
, “It’s a major problem for first-home buyers to meet both the income and deposit size needed to buy. APRA’s changes to serviceability have been particularly tough on Sydney because first-home buyers that can afford to buy are told they can’t because of the higher assessment rates used by banks.
“What it means for brokers is that the refinance market is more important than the first-home buyer market. If you got a home loan two or three years ago then you can probably meet the serviceability requirements now.”