Market grows for renters and first home buyers

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    Rental affordability improved and the number of home buyers grew during the second quarter of 2018, according to the research of Adelaide Bank and REIA.

    In a statement, REIA president Malcolm Gunning said the June quarter 2018 edition of the Adelaide Bank/REIA Housing Affordability Report found affordability has improved for renters in all states and territories except in the Australian Capital Territory and the Northern Territory. The only state or territory to show improvement in both rental and home purchase affordability was South Australia.

    However, Gunning added, “housing affordability has declined for purchases in all other states and territories in Australia.”

    According to him, the proportion of median family income needed to meet average loan payments grew by .9% to reach 32.2%, while the proportion of median income needed to meet rent payments fell from 24.1% to .7%. The number of loans across the country grew by 8.3%, with New South Wales experiencing the largest increase at 12.6%. Gunning said traditional low rates were partially responsible for the increase in home loan volumes.

    There was also a 3.8% decline in the number of new loans since the same quarter last year. “All states and territories showed an annual decline in new loans except for Tasmania where there was a 2.6% increase. The decline ranged from 13.6% in Western Australia to 0.2% in Victoria,” Gunning said.

    However, despite declines in affordability, the number of first home buyers entering the market jumped by 20% year on year; large increases occurred in New South Wales, Victoria, and Tasmania, with declines in Western Australia, Australian Capital Territory, and Queensland.

    For Gunning, state-based incentives are the most probable cause of the increase with the number of loans to first home buyers in NSW increasing 11.5% over the quarter and 68.8% compared to the June quarter 2017. The number of loans to first home buyers in Victoria increased by 10.3% over the quarter and 35.5% compared to the June 2017 quarter.

    Related stories:

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    Original Article