The September quarter edition of the Adelaide Bank/REIA Housing Affordability Report has found that affordability continued to improve slightly, encouraging first home buyers into the market.
General Manager of Adelaide Bank, Damian Percy said: “The number of first home buyers has continued to rise and rental affordability has also stabilised. Compared to the September Quarter last year, we have now observed a 14.3% increase in new finance commitments to first home buyers, bringing this segment back up to almost 20% of all residential home buyers.
“This is still quite a long way off the 30.8% level for first home buyers recorded in the June Quarter of 2009 but there are several factors that seem to be driving this growth. Median weekly family income has also increased from the September Quarter in 2011 by around $250 per month.
“The average loan size of new lending commitments is now at $320,542 and average monthly loan repayments are up slightly to $2,176, or $544 per week. The current low interest rate environment is encouraging many people to re-visit and weigh up the ‘buy VS rent’ equation.
“Certainly there are many desirable parts of Australia where it is now cheaper to buy and make loan repayments than it is to rent and around a fifth of all homebuyers are first home owners who have decided to come down on the ‘buy’ side of the equation”, Mr Percy concluded.
Fast Facts
- Victoria recorded the largest improvement with the proportion of income required to meet loan repayments decreasing 4.4% compared to the September quarter 2011.
- The number of new finance commitments to first home buyers increased by 6.0% to 26,075 in the September quarter.
- Compared to the September quarter of the previous year, new finance commitments to first home buyers increased 14.3%.
- Compared to the same quarter of the previous year, housing affordability in the Northern Territory and the Australian Capital Territory declined.
- Over the quarter, the number of loans to first home buyers increased in all states and territories with the exception of Queensland and the Northern Territory.
- Across the country New South Wales was the only state or territory to record a decrease in the number of new finance commitments to first home buyers.
- During the quarter, first home buyers made up 19.0% of the market compared to 17.9% in the June quarter.
The REIA Home Loan Affordability Indicator (HLAI) is moving in the right direction.