Housing affordability has improved marginally across the country in the March quarter 2019, with the exception of the Northern Territory, but the country’s overall rental affordability has fallen at the same time, according to research from the Real Estate Institute of Australia and Adelaide Bank.
REIA president Adrian Kelly said the March quarter 2019 edition of the Adelaide Bank/REIA Housing Affordability Report found New South Wales had the largest improvement in housing affordability with a 1.3 per cent decrease in home loan repayments.
“While rental affordability improved marginally in the larger states of New South Wales, Victoria and Queensland as well as in Western Australia and the Northern Territory, a large decline in rental affordability in South Australia and Tasmania offset this improvement, resulting in an overall decline in rental affordability nationally.”
According to the report, the total number of loans declined (excluding refinancing) to 86,909, a decrease of 20.0 per cent over the March quarter.
“This is not unusual for the first quarter of the calendar year; however, compared with the same quarter of 2018, the number of new loans declined by 13.7 per cent,” Mr Kelly said.
“The number of those entering the home loan market also declined over the year. Interestingly, while loan size decreased for changeover buyers, it increased marginally for first home buyers.”
Mr Kelly said that the RBA’s decision on Tuesday, 4 June, to cut interest rates by 25 basis points will see a further improvement in affordability.
“Subject to the banks passing on the full cut, for a first home buyer this means a saving of $70 per month based on an average loan size of $338k in the March quarter of 2019.”