Improved housing affordability leaves FHBs in the dust

by AB06 Jun 2013

The first quarter of 2013 saw a slight improvement in housing affordability, with the proportion of income required to meet loan repayments decreasing 0.5 percentage points to 29.9%, according to the Adelaide Bank/Real Estate Institute of Australia (REIA) Housing Affordability Report.

REIA president, Peter Bushby, says affordability has been slowly improving for seven consecutive quarters, with the proportion of income required at its lowest since the December quarter 2009.

“However, the number of new finance commitments to first home buyers dropped 22.5% in the March quarter, a drop of 21.3% compared to the same time last year and first home buyers made up just 14.5% of the owner-occupier market, which is the lowest number since the June quarter 2004.”

“South Australia was the only state or territory to record a rise in the number of loans to first home buyers, up by 1.8%, while the biggest falls were in Queensland and NSW where the numbers fell 43.2% and 40.6% respectively.”

Western Australia recorded the largest increase in loans to first home buyers, up by 19.2%.

“With the exception of Western Australia and Tasmania, all states and territories recorded improvements in affordability over the quarter,” says Bushby.

“With the proportion of income required to meet loan repayments 12.6 percentage points below the national average, the ACT remained the most affordable state or territory in which to buy a home and, despite the country’s third largest improvement in housing affordability, NSW remained the least affordable.”

“The Northern Territory had the largest improvement in affordability with the proportion of income required to meet loan repayments decreasing from 23.5% to 20.3%.”

“Victoria recorded an improvement in housing affordability, with the proportion of income required to meet loan repayments falling 0.4 percentage points, to 30.2%, but rental affordability declined by 0.5 percentage points to 21.7%.”

The Adelaide Bank/REIA Housing Affordability Report includes data from all major lending institutions, the Australian Bureau of Statistics and Cannex Ltd.

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