Home loan affordability report

Transcription

1 Home loan affordability report Joint Quarterly Survey No. 89. ember Quarter Low affordability challenges Gen X, Y Home loan affordability has taken another beating as the proportion of family income required to make loan repayments increased yet again over the ember quarter. Australian families now need 35.2% of their family income to pay an average home loan, up 1.4% over the quarter. The only other time home loan affordability has been this poor in the past 25 years has been the one year period between June 1989 and June CHART 1 Affordability worsened in all States and Territories except Tasmania over the ember quarter. New South Wales remains Australia s least affordable State, although Queensland s affordability fell to the same level as NSW was last quarter. Home loan affordability is best in the Australian Capital Territory, mainly attributable to median family income being greater than in all other localities. Tasmania went from being the third least affordable State in Australia in ember to being the fifth least affordable. This is largely attributable to a larger percentage increase in median family incomes over the quarter than elsewhere. It is a slight improvement on the ember quarter which recorded the lowest level of home loan affordability for Tasmania since REIA commenced publishing this data in March The largest decline in home loan affordability over the quarter was in South Australia (-6.5%), while Western Australia recorded the largest decline over the year (-18.5%). Home loan affordability in Western Australia is now at its lowest point since REIA began this data series in March Across Australia, affordability declined by 3.9% over the quarter and by 8.0% over the year. Proportion of family income required to meet loan repayments, ember Home Loan Affordability Indicator The Home Loan Affordability Indicator (HLAI) is the ratio of median family income to average loan repayments. An increasing value reflects improving affordability of housing loans. Table 1 shows the HLAIs for Australia and each of the States and Territories for the ember quarter, compared with the preceding quarter and the ember quarter. Percentage changes are shown in Table 2. A long-term series of the quarterly movements in the Home Loan Affordability Indicator from ember 1986 is shown in Chart 5. The trends in the HLAIs, benchmarked against the longer-term average values for each State and Territory, are shown in Charts 7 to 14. A range of factors influences home loan affordability from one period to the next. For example: The amount to be borrowed reflects the price of the property being purchased and the borrower s equity situation. The size of loan, interest rates and the period of the loan determine the average loan repayment. The ability to repay the mortgage depends upon the family income. The Deposit Power/Real Estate Institute of Australia s Home Loan Affordability Report is based on data from all major lending institutions. It is a comprehensive and accurate assessment of the ability of Australians to meet the cost of home purchase.

2 H O M E L O A N A F F O R D A B I L I T Y R E P O R T D E C E M B E R Q U A R T E R Table 1. Home Loan Affordability Indicators qtr qtr qtr NSW VIC QLD SA WA TAS NT ACT AUS Table 2. Percentage Change in HLAI %Change: %Change: NSW VIC QLD SA WA TAS NT ACT AUS Median House Prices Very high annual rates of growth in median house prices in capital cities, led by Sydney and Melbourne, began in mid Since mid 2004 the rate of growth in house prices has slowed in the eastern states of Australia. Prices in Western Australia and the Northern Territory have increased significantly in the past 12 months, responding to increased demand as a result of the commodity boom and population growth. Sydney: The moving annual trend median house price for Sydney was up to $521,500 in ember although it is still below the moving annual medians achieved during the period from ember 2003 to ember. Melbourne: The moving annual trend house price peaked at $376,000 in the June quarter 2004 before declining each quarter until the ember quarter. It has subsequently risen each quarter to reach $373,300 in ember. Brisbane: The moving annual trend house price for Brisbane was $329,900, continuing an unbroken trend of rises since Adelaide: The moving annual trend median house price has risen slowly to a peak of $286,300 in the ember quarter. It has been rising since Perth: Perth has recorded very strong growth in its median house prices since early. Over the year from ember quarter, the Perth moving annual trend median house price increased from $306,500 to $415,000. Canberra: From a peak of $366,300 in the March quarter, the moving annual trend price dropped marginally in the June quarter to $363,800, but has since progressively increased each quarter to $382,000 in ember. Hobart: The moving annual trend median house price has progressively increased each quarter to reach its current record level of $284,900. Over the last six quarters, however, the rate of growth has slowed. Darwin: Darwin has recorded growth in its median house prices every quarter over the past five years. The Darwin moving annual trend median house price continued to increase rapidly in the ember quarter to reach $360,000. Australia: The Australian weighted average median house price for the ember quarter was $421,422. The movement in the Australian weighted average median house price is shown in Chart 2. CHART 2 Table 3. Median house price movements Median house price 06 ($'000) Quarterly Change % Annual Change % SYDNEY MELBOURNE BRISBANE ADELAIDE PERTH HOBART DARWIN CANBERRA AUSTRALIA WEIGHTED AVERAGE

3 D E C E M B E R Q U A R T E R REIA President s message Gen X and Y Australians may well be called the Rent Generation, as home loan affordability plunged in the ember quarter. Being stuck in the rent trap is no laughing matter for Gen X and Y, struggling to save a deposit for a first home purchase. With an average first home loan of $228,600 in the ember quarter, and assuming a 10% deposit, first home buyers would have needed $25,146 as a deposit. This would have only enabled them to buy a very modest home, well below the median price in all capital cities of Australia. With the erosion of home loan affordability, it is not surprising that home ownership amongst year olds has fallen. A 2001 report by the Committee for Economic Development in Australia showed home ownership for year olds dropped 10% from 1981 to Likewise, a 2003 National Centre for Social and Economic Modelling report found that home ownership for year olds dropped from 64% in 1989 to 54% in First home buyers as a proportion of total homebuyers financed were 17.7% in ember, well below the 21.8% average in the ten years until median prices began to rise in This period included eight interest rate rises and increasing stamp duty as median prices rose, both adding to the first home buyer burden. Home ownership is not only essential for Gen X and Y now, but also into the future as they will be required to self-fund their retirement with superannuation and voluntary savings. Retirees who do not own their home need about $300,000 of additional savings yielding 5% pa to meet median rents across Australia. REIA calls on all levels of Government to address this serious issue now, by: appointing a Federal Ministerial portfolio for housing to develop a nation-wide housing strategy; establishing a housing affordability forum comprising Federal/State/Local governments and industry; increasing the FHOGS from $7,000 to at least $14,000 for both new and existing homes and index linking the scheme to the median Australian house price; improving land release and reviewing infrastructure and land development charges to reduce new housing development costs; increasing stamp duty concessions for first homebuyers; removing or reducing inequitable taxes on wealth creation such as land tax, and tax on tax; and considering more equitable ways of raising taxes and using GST to offset reductions in property taxes. Graham Joyce President, REIA Deposit Power Home ownership is still a good option. Statistics indicate that home loan affordability has reached crisis levels where Australians (on average) require more than one third of their income to meet home loan repayments. These statistics are just another reason why prospective home buyers and property investors should also consider other emerging factors affecting the property market. Recent shifts in the rental market have major implications for both home buyers and property investors. The increasing costs of rent in sought after areas and relatively flat property values in most markets raises the question - is renting still a financially worthwhile alternative to purchasing? This question gains even more significance when considering predicted rental price increases of 42% over the next five years (source: BIS Shrapnel). There are various factors affecting the current rental market crisis, which include investors exiting the market to seek better returns elsewhere, recent tax incentives favouring superannuation, and shortage of new stock coming onto the market. It seems that a generation has grown up thinking that a property purchase may be out of reach. Current home loan affordability statistics seem to support this perception. This generation however may start to realise that soon, renting may also be out of their reach. Even though living with parents for a longer period might seem attractive for some, it is not an option for everyone and is rarely viewed as a long-term solution. Finding a suitable rental property is becoming increasingly difficult and is likely to become more expensive in the coming months. The good news is that the current flat property prices in many markets offer good value for the astute, and may actually provide the best solution for those looking for future financial security. Keith Levy National Manager, Deposit Power 3

4 H O M E L O A N A F F O R D A B I L I T Y R E P O R T D E C E M B E R Q U A R T E R Home Loans Issued The total number of loans issued nationally in the ember quarter fell 2.0% over the quarter to 129,290 loans. Over the year to ember, the total number of home loans issued increased by 2.2%. Average Loan The national average home loan of $234,274 in the ember quarter was 1.7% higher than the average loan in the ember quarter. The national average loan repayment in ember rose 4.7% over the quarter to $1,785, reflecting the increase in the average loan size and the November interest rate rise. The Reserve Bank of Australia cash interest rate increased to 6.25% in November. Consequently, the average standard variable mortgage interest rate increased to 7.85% in the ember quarter. Median Family Income The national median weekly family income increased by 0.6% over the ember quarter to reach $1,171 (or $5074 per month). This was insufficient to offset the 1.7% increase in the national average home loan repayment, leading to a decline in home loan affordability across Australia. The situation was only marginally helped by the quarterly CPI being 0.1% Over the year to ember, the median weekly family income rose 2.3% (compared with the annual increase of 3.3% in the CPI) and the average monthly home loan repayment rose by 11.3% over the year, fuelled by three interest rate rises. The proportion of family income needed to pay the mortgage increased nationally from 33.8% in the ember quarter to 35.2% in the ember quarter. The movement in the proportion of median family income required to meet home loan repayments is shown in Chart 3. CHART 3 Interest Rates During the ember quarter, the Reserve Bank of Australia raised the cash rate by 0.25% to 6.25%. This was reflected in increased standard variable lending rates in the ember quarter. Fixed interest rates decreased slightly for banks and permanent building societies. The average lending rates among the three groups were: Average variable interest rate: 7.94%, a 0.28% increase from the ember quarter. Permanent 7.86%, a 0.22% increase from the ember quarter. 7.74%, a 0.49% increase from the ember quarter. Average fixed (3yr) interest rate: 7.24%, a 0.01% decrease from the ember quarter. Permanent 7.26%, a 0.02% decrease from the ember quarter. 7.42%, a 0.10% increase from the ember quarter. Chart 6 shows the relationships and the movements of the RBA cash rate, the average standard variable rate and the average three-year fixed rate by quarters over the last six years. First Home Buyers Australian Bureau of Statistics (ABS) data shows that first homebuyers averaged 20.1% of all dwellings financed since July However, for two years from July 2002 as house prices rose dramatically, the number of first home buyers in the market fell significantly, down to 14.2% of all dwellings financed by June From mid-2004, the number of first homebuyers began to increase slowly but steadily, until the first half of, which saw the numbers fluctuate, peaking at a much improved figure of 19.1% in April, before falling in the second half of. First home buyer commitments rose slightly in ember to 17.7%. The average loan size for first homebuyers increased to $228,600 in ember. First homebuyers share of all dwellings financed and the average size of their loans from ember 2004 to ember are shown in Chart 4. CHART 4 Source: ABS Catalogue No

5 D E C E M B E R Q U A R T E R Home Loan Affordability Indicator: A ratio of family income to average loan payments. (An increase denotes easier affordability). The HLAI divided by a (constant) factor of 10 is the number of times by which median family income exceeds average home loan repayments in a full year. The reciprocal value of the HLAI is the proportion of family income that is required to repay the average home loan in a full year. Average Monthly Loan Repayment: Loan repayment figures are calculated from data provided by the ABS, Cannex Pollfax, and financial institutions across Australia. Median Weekly Family Income: A family is defined as a married couple with or without dependent children. The major part of family income is adult wages and salaries. Income data are sourced from ABS records, and updated on the basis of movements in average weekly earnings. Quarterly Median House Prices/Quarterly Median Vacancy Rates: House price and vacancy data are taken from the REIA/Mortgage Choice quarterly Real Estate Market Facts. NB: Any difference between information contained in this report and previous editions of the Home Loan Affordability Report are due to revisions made to the data. Table 4. AUSTRALIA Home Loan Affordability Indicator (HLAI) Average HLAI since March quarter 1980 Proportion of family income devoted to meeting average loan repayments Median weekly family income Average monthly loan repayment % 33.8% 32.3% $1,171 $1,164 $1,145 $1,785 $1,705 $1,604 Average loan $234,274 $230,308 $226,976 Total number of loans 129, , ,449 Average loan $235,756 $232,513 $230,141 Standard variable interest 7.94% 7.66% 7.20% rate Average loan $213,060 $209,383 $190,748 Standard variable interest 7.86% 7.64% 7.14% rate Fixed interest rate 7.26% 7.28% 6.68% Average loan $229,849 $223,225 $226,976 Standard variable interest 7.74% 7.25% 6.98% rate Fixed interest rate 7.42% 7.34% 6.90% Quarterly weighted average $421,422 $412,023 $395,202 median house price (Australia) Percentage Change HLAI CPI Since previous quarter Since corresponding quarter last year

6 H O M E L O A N A F F O R D A B I L I T Y R E P O R T D E C E M B E R Q U A R T E R Table 5. NEW SOUTH WALES Home Loan Affordability Indicator (HLAI) Average HLAI since March quarter % 36.4% 36.5% Median weekly family income $1,183 $1,177 $1,174 Average monthly loan repayment $1,907 $1,855 $1,857 Average loan $250,254 $250,530 $262,804 Total number of loans 38,036 38,068 35,398 Average loan $249,089 $250,024 $265,827 Average loan $204,718 $215,180 $210,908 Standard variable interest rate 7.86% 7.64% 7.14% Fixed interest rate 7.26% 7.28% 6.68% Average loan $249,089 $260,244 $258,931 TABLE 5 The Sydney median house price increased by 0.6% to $523,600 in the ember quarter. This was 0.5% higher than in the ember quarter. The number of home loans issued in the ember quarter was virtually unchanged from the previous quarter, and the average size of a home loan decreased marginally by 0.1% over the ember quarter. Median weekly family income rose marginally (0.6%), average monthly loan repayments increased by 2.8% and the proportion of family income required to meet average loan repayments in NSW increased from 36.4% to 37.2%. Overall, the HLAI for NSW deteriorated 2.2% over the quarter and 1.9% over the year. Affordability in NSW remains Australia s lowest. Standard variable interest rate 7.74% 7.25% 6.98% Fixed interest rate 7.42% 7.34% 6.90% Quarterly median house price (Sydney) 1 $523,600 $520,400 $521,000 Quarterly vacancy rate (Sydney) 1.5% 1.7% 2.6% Percentage Change HLAI CPI Syd Since previous quarter Since corresponding quarter last year New price series where Sydney median house prices are adjusted for compositional change. Table 6. VICTORIA Home Loan Affordability Indicator (HLAI) Average HLAI since March quarter % 32.5% 30.6% Median weekly family income $1,206 $1,199 $1,196 Average monthly loan repayment $1,792 $1,688 $1,585 Average Loan $235,236 $228,028 $224,280 Total number of loans 28,266 28,403 28,130 Average loan $239,551 $232,245 $228,814 Fixed interest rate 7.42% 7.25% 6.67% Average loan NP NP NP Standard variable interest rate Fixed interest rate Average loan NP NP $202,720 Standard variable interest rate 6.98% Fixed interest rate 6.90% Quarterly median house price (Melbourne) $391,000 $375,000 $372,400 Quarterly vacancy rate (Melbourne) 1.7% 1.6% 2.1% Percentage Change HLAI CPI Melb Since previous quarter Since corresponding quarter last year TABLE 6 The median house price in Melbourne increased by 4.3% over the quarter to $391,000. This was 5.0% higher than the median price in the ember quarter. The total number of home loans decreased by 0.5% over the quarter, and the average size of a new home loans increased by 3.2%. Median weekly family income in Victoria increased marginally. The average size of monthly loan repayments increased by 6.2%. As a result, the proportion of family income required to meet the average mortgage repayment increased from 32.5% to 34.3%. Overall, the Victorian HLAI deteriorated 5.3% over the quarter and 10.8% over the year. This is the lowest level of home loan affordability in Victoria since March

7 D E C E M B E R Q U A R T E R Table 7. QUEENSLAND Home Loan Affordability Indicator (HLAI) Average HLAI since March quarter % 34.9% 33.7% Median weekly family income $1,138 $1,136 $1,097 Average monthly loan repayment $1,788 $1,715 $1,603 Average Loan $234,701 $231,713 $226,810 Total number of loans 29,611 28,984 26,329 Average loan $235,460 $232,633 $230,864 Average loan $205,254 $203,449 $186,099 Standard variable interest rate 7.86% 7.64% 7.14% Fixed interest rate 7.26% 7.28% 6.68% Average loan $237,257 $233,330 $213,539 Standard variable interest rate 7.74% 7.25% 6.98% Fixed interest rate 7.42% 7.34% 6.90% Quarterly median house price (Brisbane) $339,500 $330,000 $320,000 Quarterly vacancy rate (Brisbane) 1.5% 1.7% 2.1% Percentage Change HLAI CPI Bris Since previous quarter Since corresponding quarter last year TABLE 7 The ember quarter median house price of $339,500 for Brisbane was 2.9% higher than the median in the ember quarter and 6.1% higher than a year ago. The number of home loans issued increased by 2.2% and their average value increased by 1.3% over the quarter. The median weekly family income for Queensland increased marginally to $1,138 over the quarter. The average size of monthly loan repayments rose by 4.3%. Accordingly, the proportion of family income required to meet average loan repayments increased from 34.9% to 36.3%, and is second only to New South Wales. Overall, the Queensland HLAI deteriorated 3.9% over the quarter and 7.0% over the year. Table 8. SOUTH AUSTRALIA Home Loan Affordability Indicator (HLAI) Average HLAI since March quarter % 29.8% 28.5% Median weekly family income $1,027 $1,016 $979 Average monthly loan repayment $1,420 $1,313 $1,207 Average Loan $186,323 $177,378 $170,768 Total number of loans 11,437 11,667 10,726 Average loan $185,566 $175,880 $179,078 Average loan NP NP $184,857 Standard variable interest rate 7.14% Fixed interest rate 6.68% Average loan NP NP $146,853 Standard variable interest rate 6.98% Fixed interest rate 6.90% Quarterly median house price (Adelaide) $290,000 $289,000 $278,000 Quarterly vacancy rate (Adelaide) 0.5% 1.5% 1.7% Percentage Change HLAI CPI Adel Since previous quarter Since corresponding quarter last year TABLE 8 The Adelaide median house price of $290,000 in the ember quarter was 0.3% higher than the median for the ember quarter, but 4.3% higher than the median price of a year ago. The number of new home loans issued decreased by 2.0% whilst the average size of new mortgages increased by 5.0%. Median weekly family income increased by 1.1% in the quarter, but average monthly loan repayments increased by 8.1% in the same period, leading to an increase in the proportion of family income devoted to meeting the average loan repayment from 29.8% to 31.9%. The effect was that the SA HLAI deteriorated by 6.5% over the quarter and by 10.8% over the year. This is the worst result for South Australia since ember NP=Not available 7

8 H O M E L O A N A F F O R D A B I L I T Y R E P O R T D E C E M B E R Q U A R T E R Table 9. WESTERN AUSTRALIA Home Loan Affordability Indicator (HLAI) Average HLAI since March quarter % 32.1% 27.6% Median weekly family income $1,243 $1,239 $1,177 Average monthly loan repayment $1,820 $1,726 $1,409 Average Loan $238,933 $233,104 $199,420 Total number of loans 16,217 19,005 18,687 Average loan $239,726 $238,450 $205,697 Average loan NP NP NP Standard variable interest rate Fixed interest rate Average loan NP NP $178,859 Standard variable interest rate 6.98% Fixed interest rate 6.90% Quarterly median house price (Perth) $450,000 $440,000 $337,500 Quarterly vacancy rate (Perth) 1.0% 1.8% 1.6% Percentage Change HLAI CPI Perth Since previous quarter Since corresponding quarter last year TABLE 9 The median price of Perth homes increased by 2.3% over the quarter and 33.3% over the year to $450,000 in the ember quarter. The number of new home loans issued decreased by 14.7%. The average size of new home loans increased by 2.5%. Median weekly family income increased by 0.3%, not enough to offset the 5.4% increase in average monthly loan repayments. The proportion of family income needed to pay the mortgage increased further from 32.1% to 33.8%. The overall effect was for the WA HLAI to deteriorate by 5.0% over the quarter and by a massive 18.5% over the year. Home loan affordability in Western Australia is now at its lowest point since REIA began this series in March NA=Not available Table 10. TASMANIA Home Loan Affordability Indicator (HLAI) Average HLAI since March quarter % 33.3% 30.4% Median weekly family income $919 $893 $870 Average monthly loan repayment $1,302 $1,287 $1,145 Average Loan $170,886 $173,885 $161,979 Total number of loans 2,543 2,634 2,328 Average loan $175,238 $176,419 $171,782 Average loan NP NP NP Standard variable interest rate Fixed interest rate Average loan NP NP $151,217 Standard variable interest rate 6.98% Fixed interest rate 6.90% Quarterly median house price (Hobart) $290,000 $290,000 $276,500 Quarterly vacancy rate (Hobart) 2.3% 2.0% 2.2% Percentage Change HLAI CPI Hob Since previous quarter Since corresponding quarter last year TABLE 10 The ember quarter Hobart median house price of $290,000 was unchanged over the quarter and up 4.9% over the year. The average size of a home loan decreased by 1.7%, and the number of new home loans issued decreased by 3.5%. The median weekly family income in Tasmania increased by 2.9% to $919 while the average monthly loan repayment increased by 1.2%. As a result, the proportion of family income needed to meet the average mortgage repayment decreased to 32.7%. Over the quarter, HLAI in Tasmania improved by 1.8%, but over the year, it deteriorated by 7.3%. This is a slight improvement on the ember quarter which recorded the lowest level of home loan affordability for Tasmania since REIA commenced publishing this data in March

9 D E C E M B E R Q U A R T E R Table 11. NORTHERN TERRITORY Home Loan Affordability Indicator (HLAI) Average HLAI since March quarter % 20.5% 18.6% Median weekly family income $1,682 $1,664 $1,686 Average monthly loan repayment $1,564 $1,481 $1,359 Average Loan $205,274 $200,028 $192,291 Total number of loans 1,228 1,356 1,683 Average loan $214,356 $205,921 $199,701 Average loan NP NP NP Standard variable interest rate Fixed interest rate Average loan NP NP $160,969 Standard variable interest rate 6.98% Fixed interest rate 6.90% Quarterly median house price (Darwin) $370,000 $385,000 $328,000 Quarterly vacancy rate (Darwin) 4.6% 1.7% 4.4% Percentage Change HLAI CPI Dar Since previous quarter Since corresponding quarter last year TABLE 11 The median house price in Darwin decreased by 3.9% to $370,000 over the ember quarter. This is still a 12.8% increase over the year. The total number of new loans issued fell by 9.4% whilst the average loan size increased by 2.6%. Median weekly family income increased by 1.1% to $1,682. This proved insufficient to offset the 5.6% increase in average monthly loan repayments. Accordingly, the proportion of family income required to meeting the average mortgage repayment increased from 20.5% to 21.5%. The Northern Territory HLAI deteriorated further from 48.7 in the ember quarter to 46.6 in the ember quarter. This is a 4.3% decrease over the quarter, and a 13.4% decrease over the year. Darwin experienced the largest decrease remains the second most affordable location after ACT. Both Territories have high median weekly family incomes. Table 12. AUSTRALIAN CAPITAL TERRITORY Home Loan Affordability Indicator (HLAI) Average HLAI since March quarter % 19.0% 19.9% Median weekly family income $2,122 $2,106 $1,982 Average monthly loan repayment $1,871 $1,739 $1,706 Average Loan $245,564 $234,866 $241,447 Total number of loans 1,952 1,826 1,558 Average loan $242,382 $233,266 $239,558 Average loan NP NP NP Standard variable interest rate Fixed interest rate Average loan NP NP $258,677 Standard variable interest rate 6.98% Fixed interest rate 6.90% Quarterly median house price (Canberra) $398,000 $375,000 $368,000 Quarterly vacancy rate (Canberra) 1.6% 1.1% 2.8% Percentage Change HLAI CPI Canb Since previous quarter Since corresponding quarter last year TABLE 12 The ACT ember quarter median house price of $398,000 was 6.1% higher than in the previous quarter, and 8.2% higher than a year before. Over the ember quarter, the number of home loans issued increased by 6.9% and the average size of home loans increased by 4.5%. Median weekly family income increased by 0.8% compared with the preceding quarter. The average monthly mortgage repayment increased by 7.6%. As a result, the proportion of family income required to meet the average loan repayment increased from 19.0% to 19.8%. The overall effect was that the ACT HLAI deteriorated by 3.8% over the quarter, although over the year to ember, it improved by 0.3%. 9

10 H O M E L O A N A F F O R D A B I L I T Y R E P O R T D E C E M B E R Q U A R T E R CHART 5 CHART 6 State Home Loan Affordability Indicators A higher level indicates increased affordability CHART 7: New South Wales CHART 8: Victoria 10

11 D E C E M B E R Q U A R T E R CHART 9: Queensland CHART 10: South Australia CHART 11: Western Australia CHART 12: Tasmania CHART 13: Northern Territory CHART 14: Australian Capital Territory 11

12 Real Estate Institute of Australia Ltd The Real Estate Institute of Australia is a federation of State and Territory Real Estate Institutes. Formed in 1924, it represents the real estate industry in Australia at national and international levels. Real Estate House 16 Thesiger Court, DEAKIN ACT PO Box 234, DEAKIN WEST ACT 2600 Phone: Fax: website: publicaffairs@reia.com.au Deposit Power Deposit Power established the deposit guarantee market in Australia in 1989, and has maintained market leadership through innovative solutions and commitment to industry partners. With 17 years experience, Deposit Power is a firmly established and respected brand in Australia s finance, property development and real estate industries. Deposit Power is issued by Vero Insurance Limited ABN Deposit Power Helpline All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by means of electronic, mechanical, photocopy, recording or otherwise, without the prior consent of the publishers REAL ESTATE INSTITUTE OF AUSTRALIA ISSN: Registered by Australia Post. Publication No. PP /00045 The Deposit Power / Real Estate Institute of Australia s Home Loan Affordability Report is based on data from all major lending institutions. It is a comprehensive and accurate assessment of the ability of Australians to meet the cost of home purchase. Any differences between information contained in this and previous editions of the Home Loan Affordability Report are due to revisions in the database that may be necessary from time to time.