The June quarter edition of the Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report shows a decline in housing affordability nationally, with the proportion of income required to meet average loan repayments rising 0.9 of a percentage point to 32.2 per cent.
The number of first home buyers increased by 7.3 per cent during the quarter, a year on year increase of 20.6 per cent compared with the June quarter 2017. Rental affordability improved with the proportion of income required to meet average rental payments decreasing to 24.1 per cent – or a quarterly decrease of 0.7 percentage points.
Darren Kasehagen, Head of Distribution, Adelaide Bank said: “The number of first home buyers continues to climb and now stands at 20.6% of the market, driven by Victoria and NSW. 31.7% of FHB’s were from Victoria, while 25.5% were from NSW. The ACT was the only market to experience a decline. The average loan size to FHB’s nationally has increased to $345,700.
“The total number of new loans for the June quarter, excluding refinancing, increased by 8.3 per cent, but compared to the same quarter last year we have seen an overall decrease of 3.8%. The average loan size for all borrowers now stands at $409,900, an increase of 3.3% over the quarter or 6.0% year on year.
“Rental affordability has improved everywhere – except the ACT and NT. The decreases in rental affordability were led by NSW with a drop in rental payments of 1.3% for the quarter, while Queensland has seen the greatest improvement in rents year on year.
“Western Australia retained the crown as the State where rents require the lowest proportion of family income, with just 16.3% needed to meet the median rent, a figure that has remained relatively stable for the past year.
“At Adelaide Bank, we are open for business and looking to help borrowers across all states and territories in all market segments – be they first time buyers, existing customers, owner occupiers or investors. 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 June quarter, 9,010 were from Victoria. The number of loans to first home buyers increased by 10.3% for the quarter or 35.5 increased 35.3% year on year. 31.7% of first home buyers now come from Victoria. Rental affordability improved slightly with a 0.5% decrease for the quarter with 23.3% of income required to meet median rents.
NSW:
The proportion of family income required to meet loan repayments increased by 1.6% to 38.1%. 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 March quarter, 25.5% were from New South Wales. First home buyers now comprise 22.2% of the State’s owner-occupier market. Rental affordability improved for the quarter with a decrease of 1.3.4%. 28.8% of income is now required to meet median rents.
Queensland:
The proportion of income required to meet home loan repayments increased to 28.1%, a 0.6% increase over the quarter. Of all Australian first home buyers 20.4% were from Queensland – an increase of 2.6%. The proportion of first home buyers in the State’s owner-occupier market was 26.7%. Rental affordability improved with a decrease of 0.9% to 22.2% 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 decreasing to 27.0% or 0.2% over the quarter. In the national breakdown, 5.1% of first home buyers were from South Australia, while the proportion of first home buyers in the State’s owner-occupier market was 21.1%. Rental affordability improved by 0.4 percentage points to 22% of income.
Western Australia:
The number of first home buyers in Western Australia increased by 4.8% over the quarter. 13.2% of all Australian first home buyers were from Western Australia. Housing affordability declined with the proportion of income required to meet loan repayments increasing slightly to 23.9%. This was a 0.3 percentage point increase. Rental affordability remained unchanged at 16.3% of income, a year on year decrease of 0.5%.
Tasmania:
Housing affordability in Tasmania declined with the proportion of income required to meet home loan repayments increasing to 25.4%, an increase of 0.9 percentage points over the quarter or 1.5%. Rental affordability in Tasmania improved with the proportion of income required to meet median rents decreasing to 27.6%, a 0.5% decrease or 1.5% year on year. First home buyers in Tasmania increased by 9.0% over the quarter and by 20.5% year on year.
Australian Capital Territory:
Housing affordability in the Australian Capital Territory declined with the proportion of income required to meet home loan repayments increasing to 20.9%, a 1.2% increase over the quarter and an increase of 1.1% year on year. Rental affordability also declined slightly. The proportion of income required to meet the median rent is now 18.6%, an increase of 0.1% for the quarter or 0.7% year on year.
Northern Territory:
Housing affordability in the Northern Territory declined with the proportion of income required to meet loan repayments increasing to 21.5% for the quarter or 1.7%. This was an increase of 1.2 % year on year. Rental affordability in the Northern Territory declined slightly with the proportion of income required to meet the median rent increasing to 22.6% or 0.1 percentage points over the quarter. This was a decrease of 0.5% year on year.