Housing affordability declines again

by Julia Corderoy07 Dec 2015
National housing affordability declined over the September quarter, according to the latest housing affordability survey.

The September quarter edition of the Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report revealed that the proportion of median family income required to meet average loan repayments increased by 1.4% over the September quarter to 31.7%. This is up 1.3 percentage points compared to a year ago.

The Australian Capital Territory was the most affordable state nationwide relative to income for the September quarter. Similarly, Tasmania was relatively stable, however affordability declined in all other States.

Nationally, the average loan size increased 3.8% to $347,367 for the quarter and by 9% compared to the same time last year.

Damian Percy, general manager of Adelaide Bank said the national decrease in housing affordability is largely due to the heated New South Wales property market.

“The REIA attributes the decline largely to the increasing size of loans with NSW the only State with an average loan size over $400,000 – and approaching $415,000.  First home buyers in NSW are now borrowing 16.7% more than in September 2014.  This quarter also sees Victoria beginning to push up against the $400,000 mark.”

But despite first home buyers having to borrow more, Percy said first home buyers have been more active in New South Wales. 

“New South Wales, Victoria, Queensland, South Australia and the Northern Territory also recorded increases in the number of loans to first home buyers for the September quarter, with NSW recording the biggest rise – a figure of 9.6%.”  

Nationally however, first home buyers show a 2.2% decrease year on year.