Buying a home in the Northern Territory, Western Australia and Victoria became slightly easier in the June quarter, but home buyers in NSW continued to face high financial hurdles, new data has showed.
The June Real Estate Institute of Australia’s Deposit Power Housing Affordability Report, released today, revealed that the improvement in affordability recorded during the March quarter – a first for more than two years - was reversed in the June quarter.
The report said there was an increase of 0.4 percentage points in the proportion of income required to meet loan repayments.
“This brings affordability in line with where it was twelve months ago with 34.6 per cent of the average family income going towards loan repayments,” the report said.
NSW had the highest proportion of income required to meet loan repayments, at 38.7 per cent - 4.1 percentage points above the national average. Victoria was next highest at 35.2 per cent, followed by South Australia (34.5 per cent), Qld (33 per cent), Tasmania (29.5 per cent), WA (26.2 per cent), the NT (22.8 per cent) and ACT (18.8 per cent).
The report added that, over the quarter, the total number of new finance commitments (excluding refinancing) increased 10.6 per cent to 99,713, the largest increase observed since the June quarter 2009.
“All states and territories recorded increases in the total number of new finance commitments over the quarter, with the largest increase evident in the ACT. Over the year, declines were observed in New South Wales, Queensland, the Northern Territory, South Australia and Victoria.
“The June quarter recorded an increase in the number of new finance commitments to first home buyers; up 13.4 per cent to 22,992. Despite this increase, first home buyers represented 15.5 per cent of total new finance commitments compared to the long-term trend of 20 per cent.
“The number of loans to first home buyers increased in all states and territories during June, except the Northern Territory."
Going forward, comsumer confidence remained the key concern for the health of the housing market, said REIA acting president, Pamela Bennett.
“Consumer confidence is continuing to fall and uncertainty about the global economy will affect expectations about household finances,” she said. “For this reason, the increase of 10.6 per cent in the total number of housing loans and 13.4 per cent in the number of loans to first home buyers in the June quarter must be read with caution.
“Nonetheless, this does not mean a gloomy outlook for the housing market. The Australian economy continues to benefit from the excellent economic conditions in Asia, which is reflected in record terms of trade, solid growth in employment and disposable income.
"We can expect growth in consumption growth in the medium-term and GDP growth of 4.5 per cent for 2012.”