The latest industry report confirms that housing affordability remains high.
This is good news for buyers, and reflects low interest rates and more realistic house prices in many areas.
The latest REIA Deposit Power Housing Affordability Report revealed that housing affordability remains close to a six-year high. The report also shows that the number of first home buyer housing finance commitments increased 94.3% in 12 months.
Commenting on the report, the REIA President, David Airey, said:
“First home buyer participation reached its highest level during the June quarter, increasing to 27.9% of all housing finance commitments, compared with 26.8% in the previous quarter. This compares favourably with the quarterly average of 20.1% over the 26 year period since September 1991.”
“Figures also show that the total number of loan commitments issued nationally for the quarter increased by a dramatic 20.0% from the previous quarter to 143,292 loans. This represents an increase of 30.8% compared to the June quarter 2008 when there were 109,584 loans issued nationally.”
Keith Levy, National Manager of Deposit Power, added
“All of this activity may suggest that the next cycle in the Australian housing market is about to begin, and now would be an excellent time to buy if you are looking to capitalise on the lower interest rates and housing affordability that is better than it was twelve months ago.
It’s early days yet, but the good news is that we are certainly starting to see some ‘green shoots’ of recovery and confidence returning to the housing market.”
Affordability remaining healthy
Over the June quarter, the Australian Capital Territory remained the most affordable state or territory in which to own a home, with the proportion of income required to meet loan repayments recorded at 17.3%; a figure well below the national average.
New South Wales remained the least affordable state or territory in which to own a home, with the proportion of income required to meet loan repayments at 31.1%.
The complete state breakdown is shown in the table below:
Compared to the same quarter of the last year, all states and territories reported an increase in housing affordability with the largest improvement evident in New South Wales where the proportion of income required to meet loan repayments decreased by 11.5 percentage points.
The lowest improvement was in the Northern Territory, where the proportion of income required to meet loan repayments improved by a moderate 3.0 percentage points.
At the national level, the proportion of income required to meet home loan repayments decreased to 28.9%, down from 39.5% in the same quarter of the previous year.
Number of loans increasing
As a consequence of the low levels of mortgage interest rates and the FHOG Boost there was a considerable increase in the total number of loans (excluding refinancing) over the June quarter.
In the March quarter 2009 there were 119,358 loans recorded, however, by the end of the June quarter 2009 this had increased by 20%, taking the number of loans to 143,292.
Over the year, the total number of loans increased by 31%. Over the June quarter, the number of first home buyers increased by 19.4%, reaching 54,924; the highest since the September quarter 1991. This is an increase of 94.3% over the year.
First home buyers
The state or territory with the largest number of first home buyers continues to be New South Wales at 18,244. The Northern Territory reported the lowest number of first home buyers at 337.
The complete state breakdown is as follows:
Victoria was the state or territory with the largest increase in the number of first home buyers, increasing from 10,387 in March quarter 2009 to 13,136 in June quarter 2009, an increase of 26.5%.
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