Housing affordability improves
First home buyers decrease in all States and Territories
The March quarter edition of the Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report shows an improvement in housing affordability across all States and Territories with the proportion of median family income required to meet average loan repayments decreasing by 1.3 percentage points to 30.4 per cent. This was a decrease of 1.3 percentage points compared to the corresponding quarter in 2016. The number of first home buyers decreased in all states and territories over the March quarter 2017.
Damian Percy, General Manager Adelaide Bank said:
“While the improvement in housing affordability for the March quarter is to be welcomed, we are still in the midst of a housing affordability crisis and need to treat it as such. Recent measures by governments to assist first home buyers are similarly welcomed, but the reality is that it will take years for these policy measures to wash through the system and translate into meaningful price action.”
“The number of first home buyers decreased to 20,677 over the March quarter – a drop of 11.2%. Anything short of a national objective of halting house price inflation in Australia’s major population centres is underestimating the profound impact having some of the world’s most expensive houses in one of the world’s least densely populated nations is doing to the economic and social well-being of the nation.”
“In conversations with younger people on a recent visit to Sydney, it was clear that although they had good jobs, frugal lifestyles and relatively modest aspirations they have simply given up on the prospect of owning their own property. They haven’t given up owning their ideal property- or one in their preferred neighbourhood - they have given up on owning anything. Ever.”
"Wherever you decide to live, Adelaide Bank's continuing and widely recognised contribution to enabling home ownership 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 Percy concluded.
Fast Facts
The average loan size to Australian first home buyers is now $372,620 – a decrease of 4.3 per cent over the March quarter but an increase of 2.3% compared to last year. Victoria tops the charts as the State with the largest number of first home buyers.
Median rents increase slightly
Nationally, the March quarter saw a slight decline in rental affordability. The proportion of family income required to meet median rents increased by 0.1 percentage points to 24.6 per cent.
Across the nation:
Victoria:
Of the total number of Australian first home buyers that purchased during the March quarter, 6,037 were from Victoria. The number of loans to first home buyers in Victoria decreased by 14.7%. This represents a 2.6% increase compared to the March quarter 2016. In Victoria, first home buyers now make up 21.6% of the State’s owner-occupier market. Rental affordability declined for the quarter with an increase of 0.5% of income required to meet median rents.
NSW:
The proportion of family income required to meet loan repayments is 5.7% higher than the nation’s average. 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 March quarter, 17.4% were from New South Wales. The number of loans to first home buyers decreased by 16.2% to 3,597. When compared to the March quarter of 2016, the number of first home buyers decreased by 5.2%. First home buyers now make up only 12.3% of the State’s owner-occupier market – the lowest level across the nation. Rental affordability declined for the quarter with an increase of 0.5% of income required to meet median rents.
Queensland:
The proportion of income required to meet home loan repayments decreased to 26.7%, a 1.3 percentage point drop over the quarter. Of all Australian first home buyers over the quarter, 26.0% or 5,372 were from Queensland while the proportion of first home buyers in the State’s owner-occupier market was 23.9%. Rental affordability declined slightly for the quarter with an increase of 0.5% of income required to meet median rents.
South Australia:
In the national breakdown, 5.8% 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 to 16.8%. Rental affordability improved by 0.2 percentage points.
Western Australia:
Western Australia recorded a 6.5% decrease in the number of first home buyers over the quarter, a decrease of 1.8% compared to the March quarter of 2016. The proportion of first home buyers in the state’s owner-occupier market was 31.5%. WA’s proportion of first home buyers nationally in percentage terms of the owner-occupier market across Australia was 17.2%. Rental affordability in Western Australia improved during the March quarter with the proportion of family income required to meet the median rent decreasing to 18.6%, a drop of 0.5 percentage points over the quarter.
Tasmania:
The number of first home buyers in Tasmania decreased by 7.5% for the March quarter or 11.1% compared to the same quarter of 2016. The average home loan size to first home buyers increased by 5.6% to $240,333. Rental affordability declined with an increase of 1.3% for the quarter or 0.8% year on year.
Australian Capital Territory:
The Australian Capital Territory recorded an 18.2% decrease in the number of loans to first home buyers. When compared to the March quarter 2016, the figure decreased by 8.9%. First home buyers made up 17.8% of the Territory’s owner-occupier market with the average loan for first home buyers decreasing by 4.1% over the quarter to $305,900. Rental affordability declined for the quarter with an increase of 0.3% of income required to meet median rents. The National Capital remains the most affordable state or territory in which to buy a home or rent.
Northern Territory:
The number of loans to first home buyers in the Northern Territory decreased by 15.8% which was a 11.3% rise compared to the March quarter of 2016. The proportion of first home buyers in the Territory’s owner-occupier market was 19.8%. The average loan size to first home buyers decreased by 5% to $311,067 for the quarter or 2.6% year on year. Rental affordability improved with a decrease of 0.8%.
