National housing affordability is on the decline with families using a higher proportion of their income to repay their mortgage, new research from Adelaide Bank and the Real Estate Institute of Australia (REIA) has found.
The jointly produced Housing Affordability Report
released yesterday showed that the proportion of median family income required to meet the average loan repayment has risen by 1.0 percentage point to 31.4% across the June quarter. This was an increase of 0.2 percentage points compared to the same quarter last year.
However, the report also unveiled a more positive trend: an increase in the number of first home buyers which rose by 14.0 percentage points over the quarter or 1.0 percentage point year-on-year.
Darren Kasehagen, head of business development at Adelaide Bank, said that this slight deterioration in housing affordability should not overshadow the increase in first home buyers.
“Compared to the corresponding quarter in 2016, the number of first home buyers went up in Queensland, Western Australia, Australian Capital Territory and the Northern Territory, with both territories recording very solid FHB growth of 49.6% and 40.0% respectively,” he said.
The total number of loans increased by 9.6% while the number of loans specifically for first home buyers shot up by 14.0%, noted REIA president Malcolm Gunning.
“First home buyers now make up 14.3% of total owner occupied housing. This rate has been dropping steadily over the past five years but seems to have stabilised over the past 18 months,” Gunning said.
Kasehagen was also keen to point out other trends amongst first home buyers which were uncovered by this joint research paper.
“The average loan size to first home buyers increased by 1.2% over the June quarter and 0.6% over twelve months to $365,600.”
The size of this average loan to FHBs increased in New South Wales, Victoria, Queensland and the Northern Territory and decreased in South Australia, Tasmania and the Australian Capital Territory, he added.
Investment lending plateaus for banks
Housing affordability crisis set to worsen
Brokers grow total ADI loan approvals by 5%