Australia now more affordable
Australian home loan affordability improved nationally for the third quarter in a row during the three months to the end of March after two years of decline, according to a research report.
AMP Banking and the Real Estate Institute of Australia said affordability had improved across Australia, but differing loans and property prices meant mixed results across states.
The number of home loans issued to borrowers decreased for the first time in nine months in the first quarter of this year, falling 3.6 per cent to 107,275 from 111,338 in the previous three months. However, the figure was still higher than the number in the first quarter of last year, when 101,318 home loans were granted.
The size of an average home loan fell to A$216,338 ($1.3 million) from A$217,340, down by 0.5 per cent. Average Australian monthly loan repayments grew by just A$4 to A$1,516 a month.
Median family income in Australia rose 1.5 per cent to A$1,114 a week, which meant the percentage of family income devoted to meeting mortgage repayments fell slightly, the report said.
As a result, home loan affordability improved marginally across the nation.
Results were mixed from state to state, with affordability improving in New South Wales, Queensland and the Northern Territory, and deteriorating in Victoria, Tasmania, Western Australia and South Australia.
First-home buyers stayed away from the market, with 15.6 per cent of all homes bought by this group in the three months to the end March versus 16.6 per cent in the previous quarter.
AMP Banking managing director Michael Guggenheimer said interest rate speculation ahead of a 0.25 per cent increase in March had affected demand for home loans, particularly from first-home buyers. 'The small rise in home loan affordability indicates that the housing market might start to stabilise after years of big price increases,' he said.
