Home affordability improved across the country, except for Queensland where it has remained stable, according to a new report.
The September quarter 2018 edition of the Adelaide Bank/Real Estate Institute of Australia (REIA) Housing Affordability Report showed that rental rates tracked lower in all states and territories except for Victoria and Tasmania.
New South Wales saw the most improvement in housing affordability over the period, while the most improvement in rental affordability was seen in the Northern Territory.
“Over the quarter, the proportion of median family income required to meet average loan repayments decreased by 0.8 percentage points to 31.4%, while the proportion of median family income required to meet rent payments decreased by 0.2 percentage points to 23.9%,” said REIA President Malcolm Gunning.
The number of loans across Australia also slid by 4.8%, with decreases in all states and territories. Loans in Australian Capital Territory were down by 7.8%, marking the largest decrease in all states and territories.
Unsurprisingly, new loans also dropped by 11.9% from the same quarter in 2017. All states and territories posted a yearly decline in new loans except for Tasmania, where there was a 2.7% increase. The fall ranged from 17.6% in Western Australia to 4.4% in South Australia.
Interestingly, the number of first-home buyers decreased by 2% despite improved housing affordability.
Going by states and territories, it was found that results are varied, with large increases in the Northern Territory (14.7%) and a decline in Western Australia (-5.7%).
“The decline in first-home buyers is systematic of the credit squeeze that is emerging. While APRA’s restrictions were designed to curb high risk lending practices, the current practice of reducing loan amounts and increasing approval times across the board is becoming a constraint on economic growth,” Gunning said.
Collections: Mortgage News
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