First Homebuyers Back in September Quarter
The September quarter edition of the Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report shows an improvement in housing affordability nationally with the proportion of median family income required to meet average loan repayments decreasing by 1.2 percentage points to 30.3 per cent. This was a decrease of 0.6 percentage points compared to the same quarter in 2016. The number of first home buyers increased by 22.8% per cent during the quarter or 32.6 % year on year and there was some relief for renters, particularly in Western Australia, Queensland, South Australia and the Northern Territory. Rental affordability was steady in Victoria, but declined in NSW, the ACT and Tasmania.
Darren Kasehagen, Head of Business Development, Adelaide Bank said: "The increase in housing affordability across all States and Territories is to be welcomed and is reflected by heightened activity in the number of first home buyers coming back into the market.
"Housing affordability is still a major issue in Sydney and Melbourne, but there are some bright spots in the latest report from the other capitals that are also worthy of note. First home buyer numbers are strong in NSW with a 57.7% increase for the quarter or 70.9% year on year and very solid in Victoria with 32.2% for the quarter and 33.0% year on year.
"Another standout finding in this report was from Western Australia. WA knocked the ACT from their position of being the State or Territory with the lowest proportion of family income devoted to meeting median rents - at 17.4%. The figure for Canberra was 18.1%, and this bides well for future first home buyers in the West seeking to build a deposit and take the step toward eventual home ownership.
"The ACT had the largest decrease in average loan size for the quarter. 18.5% of family income in Canberra was devoted to meeting average loan repayments – which is still the lowest in the country - and the gap between renting and buying in Canberra is now only 0.4%. Again, an equation that may see more people now renting in the ACT deciding to take the step towards home ownership.
"Nationally, the average loan size to first home buyers increased to $319,500, or by 0.6% over the September quarter – but decreased by 0.1% over the past twelve months. For all borrowers, the average loan size decreased to $380,900 with the total number of loans increasing by 4.2% for the quarter or 12.5% year on year.
"The September quarter also saw the proportion of median family income required to meet rental payments increase nationally by 0.3 percentage points to 24.6%.
"Wherever you decide to live, Adelaide Bank's continuing and widely recognised contribution to improving housing affordability is to keep the cost of lending as low as we can, while providing great service through Australia's growing network of mortgage brokers," Mr Kasehagen concluded.
Fast Facts: Across the nation
Victoria:
Of the total number of Australian first home buyers that purchased during the September quarter, 8,786 were from Victoria. The number of loans to first home buyers increased by 32.2%. In Victoria, first home buyers now make up 26.2% of the State's owner-occupier market. Rental affordability remained steady for the quarter with 23.1% of income required to meet median rents.
NSW:
The proportion of family income required to meet loan repayments decreased by 1.9% to 36.1%. New South Wales remains the least affordable State or Territory in which to buy a home. Of the total number of Australian first home buyers that purchased during the September quarter, 23.4% were from New South Wales. First home buyers now comprise 19.0% of the State's owner-occupier market. Rental affordability declined for the quarter with an increase of 1.2% of income required to meet median rents.
Queensland:
The proportion of income required to meet home loan repayments decreased to 26.8%, a 0.5 percentage point decrease over the quarter. Of all Australian first home buyers over the quarter, 21.7% or 6,271 were from Queensland while the proportion of first home buyers in the State's owner-occupier market was 26.1%. Rental affordability improved slightly with a decrease of 0.2% to 22.8% of income required to meet median rents.
South Australia:
South Australia recorded an improvement in housing affordability with the proportion of income required to meet monthly loan repayments dropping to 25.3%- a decrease of 1.5 percentage points over the quarter. In the national breakdown, 4.8% of first home buyers were from South Australia while the proportion of first home buyers in the State's owner-occupier market recorded an increase of 2.0% to 19.2%. Rental affordability improved by 0.2 percentage points to 21.7% of income.
Western Australia:
The number of first home buyers in Western Australia increased by 7.4% over the quarter and by 17.9% compared to the same time last year. 15.3% of all Australian first home buyers were from Western Australia. Housing affordability improved with the proportion of income required to meet loan repayments decreasing to 22.4%. This was 1.2 percentage points over the quarter or 1.4% year on year. Rental affordability decreased to 17.4% recording an increase of 0.7% for the quarter or 1.8% year on year.
Tasmania:
Housing affordability in Tasmania improved with the proportion of income required to meet home loan repayments decreasing to 23.3%, a decline of 0.6 percentage points over the quarter or 0.5 percentage points year on year. Rental affordability in Tasmania declined with the proportion of income required to meet median rents increasing to 26.3%, a 0.5 percentage point increase or 2.3 points year on year. First home buyers in Tasmania increased by 1.6% over the quarter but compared to the same quarter last year recorded a 3.3% decrease.
Australian Capital Territory:
Housing affordability in the Australian Capital Territory improved with the proportion of income required to meet home loan repayments decreasing to 18.5%, a 1.3 percentage point drop over the quarter and a decrease of 1.5 percentage points compared to the same quarter last year. Rental affordability declined. The proportion of income required to meet the median rent is now 18.1%, an increase of 0.2% for the quarter or 0.8% year on year.
Northern Territory:
Housing affordability in the Northern Territory improved with the proportion of income required to meet loan repayments decreasing to 19.4% for the quarter or 0.9 percentage points. This was a decrease of 1.1 percentage points year on year. Rental affordability in the Northern Territory also improved with the proportion of income required to meet the median rent decreasing to 22.7% or 0.4 percentage points over the quarter or a decrease of 2.0 percentage points in September 2016.
