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Data from PRDnationwide Real Estate has revealed that the Northern Territory stands clear as the most affordable state or territory for home loans, but the number of first home buyers is increasing across New South Wales, which means investors are likely to face more competition in the most populated state.
During the third quarter of 2018, PRDnationwide said that the NT has improved home loan affordability the most over the year Australia-wide in its Q3 Key Market Indicators report.
According to the report, the NT’s home loan affordability index rose by 6.3 per cent over the last 12 months to March 2018, yet is lower than its performance in the second quarter, which was 8.1 per cent.
The Australian Capital Territory came in second place at an index rise of 2.2 per cent, while New South Wales came in third place despite recording a decline of 0.7 of a percentage point.
“This further confirms that affordability continues to be a major issue across Australia, declining by an average of -3.0 per cent over the past 12 months to March 2018,” a statement from PRDnationwide read.
Despite home loans becoming slightly unaffordable over the year, NSW came first for the most improved number of first home buyer loans over the year to March 2018, rising by 80.8 per cent, and this is the third quarter in a row that it topped the first home buyer loan category.
In second place was the ACT and then Victoria in third place, with percentage rises of 80.6 per cent and 35.3 per cent, respectively.
“NSW, ACT and Vic are not usually known for their friendliness towards first home buyers, yet the states that are (Queensland, South Australia and Tasmania) had their number of first home buyer loans only grow by single digits, at 5.0 per cent, 7.5 per cent and 6.9 per cent, respectively,” the report noted.
Regardless, consumer sentiment overall is at its highest point since December 2013, with the Australian Consumer Sentiment Index currently at 106.1 points, which is an improvement of 9.8 per cent over the last 12 months.
“This is momentous in the Australian market, particularly as we are seeing capital city house median prices (particularly Sydney and Melbourne) slowing down,” the report stated.
“This truly marks a return to a more sustainable level of property price growth in Australia, as well as a return to more confident consumers (towards economic health) because of it.”
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