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.