Housing affordability best in seven years, report claims
Housing affordability has improved to levels not seen since 2009.
The Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report for the June 2016 quarter has revealed the proportion of median family income required to meet average home loan repayments currently sits at 29.4%. REIA president Neville Sanders said the result was the best since the June quarter of 2009. The report runs in contrast to a recent report from the Housing Industry Association which found a decline in affordability in the June quarter.
Sanders said affordability improved over the quarter due to lower interest rates and modest increases in income.
“Most states and territories saw improvements in housing affordability. The only quarterly decline was seen in the Australian Capital Territory while no change was recorded in New South Wales and Queensland,” Sanders said.
Victoria saw the strongest improvement in affordability, with the proportion of median family income required to meet average home loan repayments falling 1.7% to 31%.
Sanders said renting was also becoming more affordable.
“The quarter also brought good news for renters with rental affordability improving as the proportion of the median family income required to meet median rents declining from 25.1% in the March quarter to 24.8% in the second quarter of 2016. The Northern Territory saw the best improvement, followed by South Australia and Tasmania,” he said.
Sanders said lending figures showed owner-occupiers were dominating the market, after tightened restrictions on investors had seen demand wane.
“Disappointingly the proportion of first home buyers appears to be on a downward spiral and is at its lowest for over two decades. Western Australia has the largest proportion of first home buyers in the owner-occupier market nationally,” he said.
- Westpac home loan rate rise: 3 things you need to know
- Home loans take months, how does this bank do 7-day approvals?
- Homestar Star Gold Variable home loan
- Finder’s RBA Survey: 87% of experts say consumer saving will dip as cash rate holds
- RBA Survey: Average Sydney house price to increase by $216,300 in 2021, say experts