Housing Affordability Improves Nationwide Last Quarter
During the first quarter of 2013, there has been a slight increase in the affordability of real estate in Australia, according to the Real Estate of Australia/Adelaide Bank Housing Affordability report.
The proportion of income required to meet loan repayment criteria dropped 0.5 per cent to 29.9 per cent.
In a recent statement, REIA president Peter Bushby said that housing affordability has slowly been improving in the last consecutive seven quarters, with the proportion of income required for a home loan at its lowest since December 2009.
However, he said that the number of first home buyers taking out new finance commitments dropped 22.5 per cent in the March quarter. This is a drop of more than 21 per cent compared to the same time period last year.
Furthermore, first home buyers made up just 14.5 per cent of the owner-occupier market – the lowest number since the June quarter in 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 per cent while the biggest falls were in Queensland and NSW where the numbers fell 43.2 per cent and 40.6 per cent respectively,” Bushby said in the statement.
The Australian Capital Territory (ACT) remained the most affordable state in which to buy a home, with the proportion of income required for loan repayment 12.6 per cent below the national average.
But, despite having Australia’s third largest improvement in housing affordability, New South Wales real estate remained the least affordable overall.
Victoria also recorded an improvement in housing affordability. The proportion of income required to meet the loan repayment criteria in the state dropped to 30.2 per cent – a drop of 0.4 percentage points.
It was the Northern Territory that topped the affordability chart, showing the largest improvement – real estate prices dropped from 23.5 per cent to 20.3.
By Darren McCoy