Housing Affordability Report

Transcription

1 Housing Affordability Report MARCH QUARTER Housing affordability improves on the back of falling interest rates as loan sizes rise and incomes stall The first quarter of showed an improvement in housing affordability nationally with the proportion of income required to meet loan decreasing by.7 percentage points to.8%. Compared to the corresponding quarter of, the figure increased by.2 percentage points. When compared to the last quarter, all states and territories saw housing affordability improving with the exception of South Australia where the proportion increased by.6 percentage points. The Northern Territory showed the greatest improvement with the proportion of income required to meet loan going down 2.8 percentage points, to.3%. Over the quarter, New South Wales once again remained the least affordable state for home with the proportion of income required to meet loan 4.2 percentage points above the national average. The Australian Capital Territory is still the most affordable state or territory in which to buy a home with the figure sitting at 19.7%. Compared to the March quarter of, housing affordability improved in Queensland, Western Australia, the Northern Territory and the Australian Capital Territory. As with the quarterly change, South Australia saw the worst annual decline with the proportion of income required to meet loan rising by 1. percentage point. During the first quarter of, the Reserve Bank of Australia (RBA) introduced a basis points cut the official cash rate bringing the figure to the historically low level of 2.%. The gap between variable and three fixed rates remained at.7 percentage points. The quarterly average variable standard interest rate decreased.3 percentage points over the quarter and also when compared to the corresponding quarter last, to 5.3%. The quarterly average three fixed rate fell.3 percentage points to 4.6% during the quarter and also.5 percentage points when compared to a earlier. The average loan size to first home increased 2.% over the March quarter and by 4.6% compared to the same time last, to $323,8. Over the quarter, the average loan size to first home increased in all the states and territories with Tasmania being the only state to record a decrease. The largest jump was seen in the Northern Territory. Compared to twelve months ago, Tasmania and the Australian Capital Territory were the only jurisdictions to record drops in the average size of a loan to first home while the figure increased 8.3% in South Australia. The total number of loans (excluding decreased 12.8% over the quarter and also 2.4% compared to the March quarter of, to 93,72. Over the quarter, all states and territories had decreases with the biggest drop recorded in the Northern Territory, down by.1%. Compared to the corresponding quarter of the previous, the number of loans increased in New South Wales, Victoria and the Australian Capital Territory while the figure fell 11.9% in Western Australia. Over the first quarter of, the average loan size increased 1.%, to $358,933. This represents an increase of 6.4% compared to a earlier. Over the quarter, with the exception of the Northern Territory, all states and territories recorded increases in the average loan size with South Australia having the biggest jumps, up by 4.7%. Compared to the March quarter of the previous, the biggest increase in the average loan size was recorded in South Australia, up by.3% while the figure for the Northern Territory went down by 1.%. Over the quarter, the number of first home decreased 15.7% to 22,182 a slight increase of.5% compared to the figure of twelve months ago. First home now make up 14.9% of the owneroccupier market the figure is significantly smaller relative to the longrun average of 19.7%. If refinancing is excluded, the number of first home as a proportion of the owner-occupier market lost.5 percentage points over the quarter; it currently sits at 23.7%. Over the March quarter, with the exception of Tasmania, all states and territories recorded decreases in the number of loans to first home. The largest drop was seen in the Northern Territory where the figure nearly halved. Median Weekly Family Income Proportion of family income required to pay loan $1,923.7% $1,927.3% $1, % $1, % $1,6 35.% $1, % Australia wide $1,615.8% $2, % ACT Compared to a ago, the number of first home went up in New South Wales, Victoria, Queensland, the Northern Territory and the Australian Capital Territory. South Australia recorded the largest decline, down by 33.3%. Repayments based on data for new borrowers. $1,299.4% Adelaide Bank/REIA Housing Affordability Report

2 President s Message March Quarter Welcome to the Adelaide Bank/ REIA Housing Affordability Report. This edition of the Adelaide Bank/ REIA Housing Affordability Report for the March Quarter shows a quarterly improvement in housing affordability, however affordability is still worse compared to the same quarter of. During the first quarter of, the proportion of median family income required to meet average monthly loan was.8%. In every state and territory, with the exception of Queensland, housing affordability improved largely driven by further declining interest rates as the average loan size continued its trend upwards and income remained relatively static. In May, REIA welcomed the further cut to the official cash rate introduced by the Reserve Bank that brought the figure to the new low of 2.%. Despite housing affordability easing, rental affordability worsened over the quarter with the proportion of median income required to meed median rents rising.3 percentage points to.1%. In this regard, REIA was pleased the -16 Budget introduced no change to the current negative gearing or capital gain tax arrangements. REIA had strongly advocated to Government that both of these measures should be retained in their current form and we welcome the Government s decision to listen to the sector on this important issue. With the report showing declines in rental affordability, ensuring stability within the sector is imperative to help stimulate housing investment in Australia. Abolition of negative gearing would result in a dwindling supply of properties for rent, escalating rents and reduced opportunities for low to middle income earning Australians to create wealth for self-funded retirement. Neville Sanders REIA President Sponsor s Message At Adelaide Bank, we understand the business of home ownership. That s why we make life as easy as possible for brokers and home, with great value products and personalised service. Our goal is to get people into homes. We ll find the best way to make it happen, and we ll find it fast. It s not just brokers who appreciate our fast turnaround times either. Real estate agents can rest assured that if a homebuyer is with Adelaide, the personalised service will ensure things run as smoothly as possible. It s a question worth asking. Encouraging home ownership should be a key priority for any home lender and Adelaide Bank s sponsorship of this report also allows us to work with the REIA to contribute to the development of sound public policy that, if implemented, will help ease the supply side problems currently putting pressure on housing affordability. Until then, Adelaide Bank s continuing and widely recognised contribution to improving housing affordability is to keep the cost of lending as low as we can, while providing great service through Australia s growing network of mortgage brokers. Please come and pay us a visit at our new-look website to see how we can help you or someone you know realise their property ownership dream sooner. Damian Percy General Manager Adelaide Bank 2

3 Housing Affordability Report The National Snapshot required to meet loan Table 1: Shows the proportion of family income needed to meet loan Chart 1 Shows the movement in the proportion of family income required to meet average home loan since March Chart 1 % Mar-98 Mar-99 required to meet average loan - Australia Mar- Mar-1 Mar-2 Mar-3 Mar-4 Mar-5 Mar-6 Mar-7 Mar-8 Mar-9 Mar- Table 1: needed to meet loan NSW 35.% 36.2% 34.6% VIC 32.8% 33.4% 32.3% QLD 28.1% 28.4% 28.3% SA 28.4% 27.8% 27.4% WA.7% 26.1% 26.4% TAS.4%.9%.2% NT.3% 28.1% 26.5% ACT 19.7%.4% 19.8% AUS.8% 31.5%.6% Rental affordability The Australian weighted average median rent for three-bedroom houses is calculated using Census data and median rents published in Bendigo Bank/REIA Real Estate Market Facts. Over the March quarter, rental affordability declined with the proportion of income required to meet rent payments rising.3 percentage points to.1%. Compared to the same quarter of, the figure decreased by.6 percentage points and rental affordability improved. Over the quarter, New South Wales, Western Australia, Tasmania and the Northern Territory saw rental affordability improving. The Northern Territory recorded the biggest decline in the proportion on the median family income required to meet median rents, down by 2.4 percentage points while the figure increased.9 percentage points in Queensland. When compared to the March quarter of the previous, with the exception of Queensland and South Australia, all states and territories recorded improvement in rental affordability. As with the quarterly change, the Northern Territory saw the best improvement with the proportion falling 3. percentage points. Despite the best improvement, the Northern Territory remained the least affordable state or territory in Australia in which to rent a property. The territory s proportion of income required to meet rent is 31.% 5.9 percentage points higher than the national level. The Australian Capital Territory remained the most affordable state or territory in which to rent a property with the figure sitting at 17.9%. Table 2 shows rental affordability expressed as the proportion of median weekly family income required to meet weekly rent for a three bedroom house. Chart 2 % Proportion of Median Weekly Family Income Spent on Rent Mar-98 Mar-99 Mar- Mar-1 Mar-2 Mar-3 Mar-4 Mar-5 Mar-6 Mar-7 Mar-8 Mar-9 Mar- required to meet: March December March Home loan.8% 31.5%.6% Rent payments.1% 24.8%.7% 3

4 Table 2: needed to meet rent NSW 28.% 28.2% 29.% VIC 23.3% 22.6% 23.4% QLD 24.2% 23.3% 24.% SA 23.3% 22.6% 23.2% WA 22.9% 23.%.% TAS 26.9% 27.% 27.1% NT 31.% 33.4% 34.% ACT 17.9% 17.1% 18.% AUS.1% 24.8%.7% First Home Buyers Over the quarter, the number of first home decreased 15.7% to 22,182 a slight increase of.5% compared to the figure of twelve months ago. The average loan size to first home increased 2.% over the March quarter and by 4.6% compared to the same time last, to $323,8. First home now make up 14.9% of the owner-occupier market. The figure is significantly smaller relative to the long-run average of 19.7%. If refinancing is excluded, the number of first home as a proportion of the owner-occupier market lost.5 percentage points over the quarter; it currently sits at 23.7%. First home share of all dwellings financed and the average size of their loans from the March quarter 6 to the March quarter is shown in Chart 3. Chart Mar-6 First Home Buyers' Share of All Dwellings Financed Sep-6 Percentage, % Average Loan Size, $' Mar-7 Sep-7 Mar-8 Sep-8 Mar-9 Sep-9 Mar- Sep- Percentage (refinancing excluded), % Factors Influencing Home Loan Affordability A range of factors influence home loan affordability: The amount to be borrowed reflects the price of the property being purchased and the borrower s equity situation. The size of the 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. Chart 4 shows the relationship between the Australian weighted average median house price, median weekly family income and average loan size. Chart 4 $ Mar Jun Sep Dec Mar Jun Median House Prices House prices and income Med Wtd Ave Price Ave Loan Size Sep Dec Mar Jun Sep Mar Jun Med Weekly Family Income $ The Australian median house price rose by 2.4% over the March quarter, to $658,68. Over the quarter, the median house price rose in all the capital cities with the exception of Brisbane and Perth where the figure dropped by 1.5% and 2.7% respectively. Compared to the corresponding quarter of the previous, the median house price went up by 8.9% and with the exception of Perth and Hobart all the capitals contributed to the increase. Detailed data on median prices for houses and other dwellings is available in the Bendigo Bank/REIA Real Estate Market Facts publication, which will be released on June. Dec Mar Jun Sep Dec Sep Dec Mar 4

5 Housing Affordability Report Median Family Income and Average Monthly Loan Repayments The national median weekly family income rose.4% to $1,615 during the March quarter of. This represents a 2.5% increase when compared to the same quarter of. During the first quarter of, the average monthly loan repayment was $2,159 a drop of 1.8% over the quarter but an increase of 3.2% when compared to the corresponding quarter of the previous. The proportion of family income required to meet loan decreased to.8%, down from 31.5% in the March quarter a.2 percentage points increase when compared to twelve months ago. Average Loan (All Borrowers) The total number of loans (excluding decreased 12.8% over the quarter and also 2.4% compared to the March quarter of, to 93,72. Over the first quarter of, the average loan size increased 1.%, to $358,933. This represents an increase of 6.4% compared to a earlier. Interest Rates During the first quarter of, the Reserve Bank of Australia (RBA) introduced a basis points cut to the official cash rate bringing the figure to the historically low level of 2.%. The gap between variable and three fixed rates remained at.7 percentage points. The quarterly average variable standard interest rate decreased.3 percentage points over the quarter and also when compared to the corresponding quarter last, to 5.3%. The quarterly average three fixed rate fell.3 percentage points to 4.6% during the quarter and also.5 percentage points when compared to a earlier. Average quarterly variable interest rates were: 5.4%, a.2 percentage points decrease over the quarter. Permanent 5.%, a.3 percentage points decline during the first quarter of. Other lenders 4.5%, a decrease of.3 percentage points over the March quarter. The average fixed (3 ) interest rates were: 4.6%, a.3 percentage points decline over the quarter. Permanent 4.6%, a decrease of.2 percentage points during the March quarter of. Other lenders 4.4%, a decrease of.5 percentage points during the quarter. Chart 5 shows the movement of the RBA cash rate, the quarterly average standard variable rate and the quarterly average three- fixed rate over the last five s. Chart 5 %, 9,5 9, 8,5 8, 7,5 7, 6,5 6, 5,5 5, 4,5 4, 3,5 3, 2,5 2, Mar- Jun- Sep- Dec- Quarterly interest rates Av. Var Rate RBA Cash Rate Av 3yr Fixed Rate The The () is the ratio of median family income to average loan. An increasing value reflects improving affordability of housing loans. Table 3 shows the for Australia and each state and territory for the March quarter of and is compared with the preceding quarter and the corresponding quarter of. Percentage changes are shown in Table 4. A long-term series of the quarterly movements in the from the March quarter 1997 is shown in Chart 6. Table 3: s NSW VIC QLD SA WA TAS NT ACT AUS

6 Table 4: Percentage Change in Chart % Change: Mar 15 Dec 14 % Change: Mar 15 Mar 14 NSW VIC QLD SA WA TAS NT ACT AUS Home loan affordability indicator over time Table 5: AUSTRALIA () Average since December quarter 1996 devoted to meeting average loan % 31.5%.6%.1% 24.8%.7% Median weekly family income $1,615 $1,68 $1,576 Average monthly loan repayment $2,159 $2,197 $2,92 Average loan $358,933 $355,541 $337,276 Total number of loans (excl 93,72 7,459 96,39 22,182 26,311 22,67 Average first home buyer loan $323,8 $317, $9,433 Average loan $365,2 $361,82 $342,78 Standard variable interest rate 5.4% 5.6% 5.6% Fixed interest rate 4.6% 4.9% 5.1% Average loan $268,363 $271,361 $1,344 Standard variable interest rate 5.% 5.3% 5.5% Fixed interest rate 4.6% 4.8% 5.1% Other Lenders Average loan $,463 $298,316 $294,572 Mar-98 Mar-99 Mar- Mar-1 Mar-2 Mar-3 Mar-4 Mar-5 Mar-6 Mar-7 Mar-8 Mar-9 Mar- Standard variable interest rate 4.5% 4.8% 5.1% Fixed interest rate 4.4% 4.9% 5.1% Percentage Change Since previous quarter 2.2%.2% -.6% 1.3% Chart 7 Australian Rent and from March Quarter 1999 Rent $ Weighted Median Rent 6

7 Housing Affordability Report New South Wales New South Wales recorded an improvement in housing affordability with the proportion of income required to meet loan falling 1.2 percentage points to 35.% an increase of.4 percentage points compared to the March quarter of. With the proportion of income required to meet loan 4.2 percentage points higher than the nation s average, New South Wales remained the least affordable state or territory in which to buy a home. New South Wales was also the second least affordable rental market in the country and recorded a slight improvement in rental affordability. The proportion of income required to meet median rent payments decreased.2 percentage points over the quarter, to 28.%. Compared to the corresponding quarter of, the proportion decreased 1. percentage point an improvement in rental affordability. Of the total number of first home that purchased during the March quarter, 22.4% were from New South Wales. The number of loans to first home decreased 18.6% to 4,96. When compared to the figure a earlier, a rise of 2.%. First home make up only 11.2% of the state s owner-occupier market the lowest level across the nation. The average loan to first home increased 1.4% over the quarter a rise of 7.9% when compared to the March quarter of, to $356,767. Over the quarter, New South Wales recorded a 14.5% decrease in the number of loans (excluding, to,578 a 1.5% increase when compared to the March quarter of. New South Wales is the only state or territory with the average loan size above the $, mark. The figure increased.1% over the quarter and 8.2% compared to twelve months ago, to $5,965. Table 6: NEW SOUTH WALES () Average since December quarter devoted to meeting average loan 35.% 36.2% 34.6% 28.% 28.2% 29.% Median weekly family income $1,6 $1,598 $1,553 Chart 8 Quarterly value Long term average Chart 9 Rent $ per week Quarter Rents and for Sydney from March Consumer Price Index Average monthly loan repayment $2,441 $2,56 $2,328 Other dwellings Average loan $5,965 $5,45 $375,277 Total number of loans (excl.,578 29,916,3 4,96 6,93 4,865 Average first home buyer loan $356,767 $351,967 $3,567 Average loan $421,279 $418,369 $385,18 Average loan $267,495 $267,476 $249,398 Other Lenders Houses NSW is the only state or territory with the average loan size above the $, mark. Average loan $3,794 $316,871 $316,496 Percentage Change Sydney Since previous quarter 3.6%.5% -1.% 1.6% 7

8 Victoria Chart Over the quarter, Victoria showed an improvement in housing affordability, with the proportion of income required to meet loan going down by.6 percentage points, to 32.8%. Compared to a earlier, this is a downturn in housing affordability with the figure rising.5 percentage points. 35 Quarterly value Long term average Rental affordability worsened over the quarter with the proportion of income required to meet median rents going up by.7 percentage points, to 23.3%. The figure decreased marginally by.1 percentage point when compared to the March quarter of. 15 Of the total number of first home that purchased during the March quarter, 29.2% were from Victoria. During the quarter, the number of loans to first home decreased 14.7%, to 6,485, however when compared to the same quarter of the previous, the state had a 16.7% rise. In Victoria, first home make up 16.2% of the state s owner-occupier market and in the first quarter of, the average loan to first home was $322,9. This is a rise of 2.2% over the quarter and also an increase of 4.3% when compared to the figure of last. 5 Chart 11 Quarter In Victoria, the total number of loans (excluding went down 12.9% during the quarter but increased 1.6% compared to the March quarter of, to 24,677. At $365,931, the average loan size gained 1.1% over the March quarter and 6.9% when compared to the corresponding quarter of Rents and for Melbourne from March Table 7: VICTORIA () Average since December quarter 1996 devoted to meeting average loan % 33.4% 32.3% 23.3% 22.6% 23.4% Median weekly family income $1,548 $1,546 $1,5 Rent $ per week Consumer Price Index Average monthly loan repayment $2,1 $2,236 $2,124 Average loan $365,931 $361,82 $342,387 Total number of loans (excl. 24,677 28,339 24,289 6,485 7,67 5,558 Average first home buyer loan $322,9 $316,67 $9,733 Houses Other dwellings Average loan $368,934 $363,45 $344,585 Average loan n/a n/a $6,447 Other Lenders Average loan n/a n/a $29,88 In Victoria, first home make up 16.2% of the owner-occupier market. Percentage Change Melb Since previous quarter 1.7%.1% -1.6% 1.% 8

9 Housing Affordability Report Queensland Chart 12 Housing affordability in Queensland improved compared to the December quarter and also when compared to the March quarter of. The proportion of income required to meet home loan lost.3 percentage points during the quarter and.2 percentage points over last twelve months and is now 28.1%. 35 Quarterly value Long term average Rental affordability in Queensland worsened over the quarter and when compared to the March quarter of with the proportion of the median family income required to meet the median rent going up by.9 and.2 percentage points respectively, to 24.2%. Over the March quarter, the number of loans to first home in Queensland dropped 12.2%, to 4,321 an increase of 4.9% when compared to the corresponding quarter last. Of all Australian first home over the quarter, 19.5% were from Queensland while the proportion of first home of Queensland s owner-occupier market was 15.%. The average loan size to first home increased 2.8% during the quarter and also.4% compared to a earlier, to $295,633. Queensland recorded decreases in the number of loans excluding refinancing over the quarter and also when compared to the March quarter of, down by 9.8% and 4.3% respectively, to 19,958. The average loan size increased 1.9% during the quarter, to $322,618 a 4.6% rise compared to the last quarter of. Table 8: QUEENSLAND () Average since December quarter 1996 devoted to meeting average loan % 28.4% 28.3% 24.2% 23.3% 24.% Median weekly family income $1,594 $1,588 $1,56 Average monthly loan repayment $1,9 $1,956 $1, Chart 13 Rent $ per week Quarter Rents and for Brisbane from March Consumer Price Index Average loan $322,618 $316,539 $8,571 Total number of loans (excl. 19,958 22,129,863 4,321 4,924 4,1 Average first home buyer loan $295,633 $287,467 $294,5 Houses Other dwellings Average loan $3,9 $321,512 $8,42 Other Lenders Percentage Change Brisbane Since previous quarter 1.1%.%.8% 1.4% Of all Australian first home, 19.5% are from Queensland. 9

10 South Australia South Australia was the only state or territory to record a quarterly decline in housing affordability across Australia with the proportion of income required to meet monthly loan increasing.6 percentage points, to 28.4%. Compared to the March quarter of, the figure increased 1. percentage point. Rental affordability worsened with the proportion of income required to meet rent payments rising.7 percentage points over the quarter and.1 percentage point compared to the March quarter of, to 23.3%. Over the March quarter, the number of loans to first home in South Australia fell 18.7% to 1,182. The state had a 33.3% fall when compared to the same quarter of the biggest decline across the country. Of all Australian first home over the quarter, 5.3% were from South Australia while the proportion of first home of South Australia s owner-occupier market was 12.8%. The average loan size to first home increased over the quarter and also when compared to a earlier, up by 3.6% and 8.3% respectively to $265,867. In South Australia, the total number of loans decreased 11.7% over the quarter, to 6,212. This represents a 6.6% drop compared to the March quarter of. At $298,722, the average loan size rose 4.7% over the last quarter of and.3% when compared to twelve months ago. Nationally, the state has the second smallest average loan size. Table 9: SOUTH AUSTRALIA () Average since December quarter 1996 devoted to meeting average loan % 27.8% 27.4% 23.3% 22.6% 23.2% Median weekly family income $1,46 $1,462 $1,416 Average monthly loan repayment $1,796 $1,763 $1,68 Chart 14 Chart 15 Rent $ per week Quarterly value Long term average Quarter Rents and for Adelaide from March Consumer Price Index Average loan $298,722 $285,285 $27,88 Total number of loans (excl. 6,212 7,32 6,651 1,182 1,453 1,772 Average first home buyer loan $265,867 $6,567 $245,5 Average loan $8,642 $295,6 $282,742 Houses Other dwellings Other Lenders Percentage Change Adelaide Since previous quarter -1.9%.1% -3.6% 1.1% South Australia was the only state or territory to record a decline in housing affordability over the quarter.

11 Housing Affordability Report Western Australia Chart 16 Western Australia saw an improvement in housing affordability over the quarter and also when compared to the corresponding quarter of with the proportion of income required to meet loan going down.4 and.7 percentage points respectively, to.7%. Rental affordability in Western Australia improved with the proportion of family income required to meet the median rent going down by.1 percentage point over the quarter and 2.1 percentage points when compared to the before, to 22.9% Quarterly value Long term average Western Australia had a 14.6% decrease in the number of loans to first home over the first quarter of, to 4,261. Compared to the same quarter of, the figure decreased 11.6%. At.4%, the state has the highest proportion of first home of the owner-occupier market across Australia. The average loan to first home went up 2.5% over the quarter and 3.4% compared to the figure twelve months ago, to $341,867. Of all Australian first home who purchased during the quarter, 19.2% were from Western Australia. Over the March quarter, the total number of loans (excluding went down by 14.2% to 12,984 which is a 11.9% drop compared to the before. The average loan increased 2.% over the quarter, to $355,988 a 2.5% rise when compared to the March quarter of. Table : WESTERN AUSTRALIA () Average since December quarter devoted to meeting average loan.7% 26.1% 26.4% 22.9% 23.%.% Median weekly family income $1,923 $1,911 $1,884 Average monthly loan repayment $2,141 $2,158 $2,153 Average loan $355,988 $349,174 $347,144 Total number of loans (excl. 12,984 15,127 14,734 4,261 4,987 4,822 Average first home buyer loan $341,867 $333,367 $3, Chart 17 Rent $ per week Quarter Rents and for Perth from March Other dwellings Houses 115 Consumer Price Index Average loan $355,8 $348,533 $347,661 Other Lenders Percentage Change Perth Since previous quarter 1.3%.1% 2.6% 1.4% Western Australia saw the largest drop in the number of new loans over the. 11

12 Tasmania Chart 18 Tasmania recorded an improvement in housing affordability with the proportion of income required to meet home loan falling.5 percentage points to.4% a.2 percentage points rise compared to the same figure last Quarterly value Long term average Rental affordability in Tasmania improved marginally with the proportion of income to meet median rents sitting at 26.9% a.1 and.2 percentage points decrease over the quarter and when compared to the March quarter of respectively. Tasmania recorded the only quarterly rise in the number of first home across Australia, up by 2.3% to 8. When compared to the March quarter of, a fall of 4.9%. The average loan to first home went down 3.6% over the quarter and.8% compared to the March quarter of the previous, to $216,7. First home in Tasmania made up 15.9% of the owner-occupier market. Over the March quarter, the total number of new loans (excluding decreased 4.1% to 1,922. Compared to the corresponding quarter of the before, the figure went down by 1.1%. At $237,595, the average loan size increased 1.1% over the March quarter and also 4.5% compared to the corresponding quarter of Chart 19 Quarter Table 11: TASMANIA () Average since December quarter 1996 devoted to meeting average loan %.9%.2% 26.9% 27.% 27.1% Median weekly family income $1,299 $1,295 $1,293 Average monthly loan repayment $1,429 $1,452 $1,4 Rent $ per week Rents and for Hobart from March Consumer Price Index Average loan $237,595 $235,16 $227,365 Total number of loans (excl. 1,922 2,5 1, Average first home buyer loan $216,7 $224,9 $218,5 Average loan $2,312 $238,2 $235,445 other Lenders Houses Other dwellings Percentage Change Hobart Since previous quarter 2.1%.3% -.8%.9% Tasmania was the only state or territory where the number of loans to first home increased over the quarter. 12

13 Housing Affordability Report Northern Territory Over the March quarter, the Northern Territory saw the biggest improvement in housing affordability over the quarter and also compared to the March quarter of. The proportion of income required to meet loan is now.3% a 2.8 percentage points lower than in the last quarter of and also 1.2 percentage points less compared to twelve months ago. The Northern Territory is the least affordable jurisdiction in which to rent with the proportion of income required to meet the median rent sitting at 31.%. Rental affordability improved over the quarter and also when compared to the before with the proportion falling 2.4 and 3. percentage points respectively. The Northern Territory recorded the biggest drop in the number of loans to first home over the quarter with the figure almost halving from to 161. Compared to twelve months ago, this represents a 9.5% rise. The average loan to first home went up by 8.3% during the March quarter, showing a 4.4% increase compared to the same quarter a earlier, to 344,. First home make up 17.% of the Territory s owner-occupier market. The Northern Territory recorded the biggest quarterly drop in the total number of loans (excluding, down by.1%, to 645 a 8.9% drop compared to the March quarter of. The average loan went down by 6.9% over the quarter and also 1.% when compared to twelve months before, to $351,64 the only decline across the country. Table 12: NORTHERN TERRITORY () Average since December quarter devoted to meeting average loan.3% 28.1% 26.5% 31.% 33.4% 34.% Median weekly family income $1,927 $1,915 $1,918 Chart Quarterly value Long term average Chart 21 Rent $ per week Quarter Rents and for Darwin from March Consumer Price Index Average monthly loan repayment $2,111 $2,332 $2,199 Average loan $351,64 $377,3 $354,445 Total number of loans (excl Average first home buyer loan $344, $318,33 $329,767 Houses Other dwellings Average loan $375,366 $381,679 $371,149 Other Lenders The NT had the best improvement in housing affordability over the quarter. Percentage Change Darwin Since previous quarter 11.2% -.2% 4.8%.8% 13

14 Australian Capital Territory The Australian Capital Territory recorded an increase in housing affordability with the proportion of income required to meet home loan falling by.7 percentage points over the March quarter to 19.7%. This represents a.1 percentage point decline when compared to the March quarter of. The Australian Capital Territory also showed a decline in rental affordability over the quarter with the proportion of income required to meet the median rent going up by.8 percentage points, to 17.9%. Compared to twelve months ago, the figure lost.1 percentage point. Over the quarter, the Australian Capital Territory recorded a 26.1% decrease in the number of loans to first home, to 4. When compared to twelve months before. This is a rise of 14.1%. During the quarter, first home made up 17.1% of the Territory s owneroccupier market. The average loan for first home went up 3.6% over the quarter but decreased 2.8% when compared to a earlier, to $9,933. The Territory had the second biggest decrease in the number of loans excluding refinancing over the quarter with the figure going down 15.8%, to 1,726. Compared to the March quarter of, the Australian Capital Territory had the biggest jump across the state, up by 4.7%. The average loan size gained.1% over the quarter and is now $358,714 a 3.6% rise compared to the corresponding quarter of. Table 13: AUSTRALIAN CAPITAL TERRITORY () Average since December quarter 1986 devoted to meeting average loan %.4% 19.8% 17.9% 17.1% 18.% Median weekly family income $2,521 $2,58 $2,499 Average monthly loan repayment $2,157 $2,215 $2,149 Chart 22 Quarterly value Long term average 6 5 Chart 23 Rent $ per week Quarter Rents and for Canberra from March Consumer Price Index Average loan $358,714 $358,4 $346,396 Total number of loans (excl. 1,726 2,5 1, Average first home buyer loan $9,933 $299, $318,8 Houses Other dwellings Average loan $362,863 $358,486 $347,837 other Lenders Percentage Change Canberra Since previous quarter 3.1% -.1%.4%.6% The ACT remains the most affordable state or territory in which to buy a home or rent. 14

15 Adelaide Bank/REIA Housing 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 report and previous editions of the Adelaide Bank/REIA Housing Affordability Report are due to revisions in the database that may be necessary from time to time. : A ratio of family income to average loan payments. (An increase denotes easier affordability). The divided by a (constant) factor of is the number of times by which median family income exceeds average home loan in a full. The reciprocal value of the is the proportion of family income that is required to repay the average home loan in a full. Loans: Average size and total number for first home and all borrowers (excluding are average data over the quarter, based on all lender data from the ABS. Average Monthly Loan Repayment: Loan repayment figures are calculated from data provided by the ABS, Cannex Pollfax, and financial institutions across Australia. From the June quarter 12, interest rates are calculated as weighted average interest rates for banks, building societies and other lenders. 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 Bendigo Bank/REIA Real Estate Market Facts publication. Proportion of Family Income to Meet Rent Payments: The percentage of Median Weekly Family Income required to meet the median rent for a three bedroom house. Rents are obtained from Bendigo Bank/REIA Real Estate Market Facts publication. Real Estate Institute of Australia 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 26 Phone: (2) Fax: (2) Website: reia@reia.com.au Adelaide Bank Adelaide Bank is a leading customer connected business, operating for more than s. Adelaide Bank was established in January 1994, originating from the Co-operative Building Society of South Australia, which was Australia s largest building society at that time. Adelaide Bank is now the dedicated intermediary lending business of Bendigo and Adelaide Bank Limited. We have a specialised focus on supporting intermediaries through continued product innovation and exceptional service levels. Adelaide Bank s success is achieved by distributing mortgage products through partnerships with industry professionals. This offers our customers the freedom of choice when sourcing products that best meet their financial needs. Adelaide Bank Helpline within Australia: overseas: 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 /45 15

16 We ve been connecting people to homes for over a hundred s. At Adelaide Bank, we understand the business of home ownership. That s why we make life as easy as possible for brokers and home, with great value products and personalised service. Our goal is to get people into homes. We ll find the best way to make it happen, and we ll find it fast. adelaidebank.com.au/itspersonal Adelaide Bank a Division of Bendigo and Adelaide Bank Limited ABN AFSL/Australian Credit Licence