Housing affordability has improved slightly in the first quarter of this year with the proportion of income required to meet loan repayments falling 0.5 per cent to 29.9 per cent, according to the Adelaide Bank/Real Estate Institute of Australia (REIA) Housing Affordability Report.
“Housing affordability has been slowly improving for seven consecutive quarters, with the proportion of income required at its lowest since the December quarter 2009,” REIA president Peter Bushby said.
“However, the number of new finance commitments to first home buyers dropped by 22.5 per cent in the March quarter – a drop of 21.3 per cent compared to the same time last year – and first home buyers made up just 14.5 per cent of the owner-occupier market, which is the lowest number since the June quarter 2004.”
South Australia was the only state or territory to record a rise in the number of loans to first home buyers, up 1.8 per cent.
The largest falls were in Queensland and New South Wales, which fell 43.2 per cent and 40.6 per cent respectively.
Western Australia recorded the largest increase in loans to first home buyers, up by 19.2 per cent.
All states and territories recorded improvements in affordability over the March 2013 quarter, except for Western Australia and Tasmania.
“With the proportion of income required to meet loan repayments 12.6 percentage points below the national average, the ACT remained the most affordable state or territory in which to buy a home and, despite the country’s third largest improvement in housing affordability, NSW remained the least affordable," said Mr Bushby.
“The Northern Territory had the largest improvement in affordability over the year, with the proportion of income required to meet loan repayments decreasing from 23.5 per cent to 20.3 per cent.
“Victoria recorded an improvement in housing affordability, with the proportion of income required to meet loan repayments falling 0.4 percentage points to 30.2 per cent, but rental affordability declined by 0.5 percentage points to 21.7 per cent.”