Improved housing affordability sees flood of Fist Home Buyers

February 11, 2018

Housing affordability has improved while first home buyers enter the market in even greater numbers, according to brand new research.

The latest Housing Affordability Report released by the Real Estate Institute of Australia (REIA) in partnership with Adelaide Bank has revealed some positive market trends across the country.

The proportion of median family income required to cover the average mortgage repayment dropped by 1.2 percentage points to 30.3% during the September quarter, the data found.

The number of first home buyers in the market sits at 24.5% of the total owner occupied housing market excluding refinancing. This is the highest rate seen since September 2013 with numbers dropping consistently over the past five years, said REIA president Malcolm Gunning.

“The number of first home buyers increased by 22.8% for the quarter and by 32.6% over the twelve months.”

State-by-state, first home buyers rose by 57.7% in New South Wales, 32.2% in Victoria, 20.0% in the Australian Capital Territory and 14.3% in the Northern Territory.

While housing affordability is still a major issue in Sydney and Melbourne, strong upwards trends in first home buyers in NSW and Victoria are noteworthy, said Darren Kasehagen, head of business development at Adelaide Bank.

Overall, The number of loans across the nation increased by 4.2% over the quarter and 12.5% year-on-year. The average loan size decreased to $380,900 for all borrowers and $319,500 for first home buyers.

“The ACT had the largest decrease in average loan size for the quarter. 18.5% of family income in Canberra was devoted to meeting average loan repayments,” Kasehagen said.

A full state-by-state breakdown of the report’s key figures can be found below:

% income for av. loan repayments Av. loan overall No. of loans (excl. refinance) No. of loans for FHBs Av. loan for FHBs
NSW 36.1% $453,454 35,565 6,775 $361,333
VIC 32.2% $392,604 33,580 8,786 $328,800
QLD 26.8% $327,635 24,061 6,271 $290,600
WA 22.4% $330,074 12,253 4,432 $305,733
SA 25.3% $291,088 7,200 1,385 $271,200
ACT 18.5% $359,452 2,554 684 $288,700
TAS 23.3% $240,658 2,204 386 $244,367
NT 19.4% $299,511 695 200 $299,833
AUST 30.3% $380,916 118,112 28,919 $319,500

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