Marginal Improvement in Housing Affordability
Australia has had a marginal improvement in housing affordability according to the March quarter 2014 Adelaide Bank/Real Estate Institute of Australia (REIA) Housing Affordability Report.
The report says the proportion of income required to meet loan repayments decreased 0.2 percentage points to 30.6% over the quarter.
REIA President Peter Bushby says, “New South Wales, the Northern Territory and the ACT all improved.”
“The ACT remained the most affordable state or territory in which to buy a home with the proportion of income required to meet loan repayments sitting at 19.8% while New South Wales remained the least affordable state or territory in which to buy a home with the proportion of income required to meet loan repayments 4.0 percentage points above the national average.”
“Compared to a year earlier, housing affordability improved in all states and territories.”
“Disappointingly, first home buyers were still at very low levels and made up just 12.8% of the owner-occupier market. Despite a small increase from its lowest point ever, this figure remains persistently low compared to the long-run average proportion of 19.8%.”
“Victoria continued to lose first home buyers following changes by the state government. Numbers were down by 13.3% over the March quarter and 26.5% compared to a year earlier. Over the past 12 months, however, Queensland was up by 25.0% when it comes to first home buyers.”
“Of the states’ owner-occupier markets, first home buyers in South Australia made up 18.8%, Western Australia measured 22.1% and first home buyers in Tasmania made up 17.2%.”
“With Budget forecasts of moderate growth and inflation well within the RBA’s target zone, interest rates should remain low for some time and that is good news for home owners and prospective buyers,” concluded Mr Bushby.