Housing Affordability Up But First Home Buyers Suffering
The latest Adelaide Bank/REIA Housing Affordability Report indicates that housing is becoming more affordable for Australians, with figures showing improvement for the past year and a half, though the number of newcomers to the market has dropped markedly.
Housing affordability improves in the December quarter
The December quarter 2012 recorded an improvement in housing affordability with the proportion of income required to meet loan repayments decreasing 1.4 percentage points to 30.4%.
Largely due to a higher average income, the Australian Capital Territory remained the most affordable state or territory in which to buy a home, with the proportion of income required to meet loan repayments at 18.7%. Though the proportion of income required to meet loan repayments decreased to 36.0%, New South Wales remained the least affordable state or territory in which to buy a home.
Compared to the 2011 December quarter, all states and territories recorded improvements in housing affordability, the largest in Queensland and South Australia.
Proportion of first home buyers at lowest level since 2005
Australian median house prices increased by 3.8% over the quarter to $533,099, with Melbourne and Hobart recording the largest increases, up by 7.8% and 7.4% respectively. (Detailed data on median house prices and other dwellings is available in Bendigo Bank/REIA Real Estate Market Facts).
Over the December 2012 quarter, the number of new finance commitments to first home buyers decreased 9.1% and by a total of 17.4% over the year. First home buyers made up 16.5% of the market, which is the lowest level since the March quarter 2005.
In the rental market, improvements in rental affordability were recorded throughout the country with the exception of Tasmania and the Northern Territory.
By: Peter Bushby