Lower repayments and higher wages mean affordability has improved around the country, says Adelaide Bank/REIA Housing Affordability Report.
Housing affordability improved nationally during the March quarter, with the proportion of median family income required to meet average loan repayments easing to 30%, a decrease of 2.4% percentage points from the previous quarter, according to the Adelaide Bank/Real Estate Institute of Australia Housing Affordability Report.
Compared to the corresponding quarter of 2015, the figure decreased by 0.8 percentage points.
The improvement in affordability don't just mean repayments were down, wages were also higher.
The report found that national median weekly family income increased 0.5% to $1,652 during the March quarter, or a 2.3% increase when compared to the same quarter last year.
Average monthly loan repayments were $2,144, a 7.0% decrease over the quarter, but an increase of 0.7% when compared to the same quarter last year.
Damian Percy, General Manager, Adelaide Bank said, “When compared to the previous quarter, all states and territories saw improvements in housing affordability with the exception of the Northern Territory, where the proportion of income required to meet loan repayments increased by 0.7 percentage points. The decrease in the national figure to 30% is to be welcomed as this is now on the borderline of what has traditionally been viewed as the measure of 'housing stress'.
“New South Wales recorded the biggest improvement in housing affordability with the proportion of income required to meet loan repayments decreasing by 4.0 percentage points, to 35.4%. However, NSW still holds the dubious honour of remaining the least affordable state for homebuyers. The proportion of income required to meet loan repayments in NSW is still 5.4% above the national average,” said Percy.
Percy also pointed out that the number of first-home buyers in the market has declined.
“Nationally, the number of first-home buyers has decreased by 16.0% to 22,640. Year on year, this is a decrease of 2.4% with first home buyers now making up 14.6% of the owner-occupier market, the lowest since the June quarter of 2004. Western Australia has the highest proportion of first-home buyers on the owner-occupier market nationally.
“Tasmania was notable in that the number of first-home buyers increased by 6.6% over the March quarter, the only increase across the country. In further good news for Tasmanians, the First Home Owners Grant in that state which applies to the construction of new homes has recently been doubled to $20,000 until 30 June 2017, which should further stimulate housing construction,” said Percy.
While housing affordability is improving, rental affordability is not.
“Rental affordability declined nationally in the March quarter with the proportion of income required to meet rent payments for three-bedroom houses rising by 0.5 percentage points to 25.1%. This figure remained unchanged compared to the same quarter of 2015,” said Percy.
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