The June quarter edition of the Adelaide Bank/REIA Housing Affordability Report has found that affordability across Australia has improved slightly for four consecutive quarters.
Median weekly family income is now $1,560, compared to $1,493 in the June Quarter 2011. The average monthly loan repayment is $2,155 compared to $2,290 in the June Quarter 2011.
Compared with the June quarter 2011 all Australian states and territories recorded improvements in housing affordability. The number of loans to first home buyers increased by 5.9% to 25,101 for the June quarter 2012 and by 11.8% compared to the June quarter of the previous year.
The number of loans to first home buyers increased in all states and territories with the exception of New South Wales and the Northern Territory.
Victoria was the standout, recording the largest increase in the number of first home buyers for the quarter, up by 23.5%. Victoria also recorded the largest increase in the total number of loans, up by 16.0%. The total number of loans Australia-wide (excluding refinancing) increased 8.9% over the June quarter to 91,982.
General Manager of Adelaide Bank, Damian Percy said: “The figures seem to indicate that many people are now deciding to get on with their lives and are again making decisions about their housing choices – regardless of continuing volatility in global financial markets.”
“I think simple timing is a factor. Age waits for no-one. Older people in bigger houses make lifestyle choices to ‘downsize’, younger people have growing families and need to upsize. The imperative to ‘right-size’ your dwelling at a particular life stage can drive decision-making to an extent.
“Many people have been delaying these important choices and housing decisions for nearly five years.
“In June 2011, 35.4% of family income was required to meet home loan repayments. In the June Quarter 2012, the figure had come down to 31.9%, a 3.5 percentage point drop.
“This is still a significant chunk of family income, but moving nonetheless to relieve some of the pressure on household budgets. Appropriate and affordable housing underpins stable and successful communities and we forget this at our peril.
“In terms of rental costs across the nation, we are seeing stability in most cases and mounting evidence to suggest that in some areas, it can now be more affordable to meet the cost of mortgage repayments over renting,” Mr Percy concluded.