Housing Housing Affordability Affordability Report Report
March quarter 2018
Housing affordability improves whilst rental affordability declines State of the nation
Lending trends
The March quarter 2018 showed an improvement in housing affordability nationally with the proportion of income required to meet loan repayments decreasing to 31.3%, a decrease of 0.3 percentage points over the quarter but an increase of 0.9 percentage points compared to the corresponding quarter of 2017.
The total number of loans (excluding refinancing) decreased to 100,748, a decrease of 16.0% over the March quarter and 2.7% over the same quarter last year.
Over the quarter, housing affordability improved in all states and territories, except Victoria, South Australia and the Australian Capital Territory. Compared to the March quarter 2017, housing affordability declined in all states but improved in the Northern Territory and the Australian Capital Territory.
Cash rate During the March quarter, the Reserve Bank of Australia (RBA) maintained the official cash rate at 1.5%. The quarterly average variable standard interest rate remained stable at 5.2%. The quarterly average three-year fixed rate increased by 0.1 percentage point to 4.2%, 0.1 percentage point higher than for the same time last year.
First home buyers The number of first home buyers decreased to 26,458, a decrease of 14.5% during the quarter but an increase of 28.0% compared to the March quarter 2017. First home buyers now make up 17.8% of the owner-occupier market and, if refinancing is excluded, the figure currently sits at 26.3%. The number of first home buyers decreased in all states and territories over the March quarter 2018, with the largest decrease in the Northern Territory (21.0%). Compared to the corresponding quarter 2017, the number of first home buyers increased in all state and territories, with increases ranging from 0.5% in Western Australia to 80.8% in New South Wales. The average loan size to first home buyers increased to $330,167, an increase of 0.5% over the March quarter and an increase of 5.3% over the past twelve months. Over the quarter, the average loan size to first home buyers increased in all states and territories except Western Australia, Tasmania and the Northern Territory. Compared to twelve months ago, the average loan size to first home buyers increased in all states and territories except for the Northern Territory where it decreased by 10.5%.
Over the quarter, the total number of loans (excluding refinancing) decreased in all states and territories with the largest decrease in New South Wales and Victoria (17.9%) and the smallest decrease in Tasmania (9.2%). Compared to the corresponding quarter 2017, the number of loans decreased in all states and territories except for Victoria and the Australian Capital Territory. Over the March quarter, the average loan size decreased to $396,910, a decrease of 0.5% over the quarter but an increase of 6.5% compared to a year ago. During the quarter, the average loan size increased in Victoria, Queensland, South Australia and the Australian Capital Territory, but decreased in New South Wales, Western Australia, Tasmania and the Northern Territory. Compared to the March quarter 2017, the average loan size increased all states and territories, except the Northern Territory where it decreased by 3.6%.
Proportion of family income required to meet loan repayments & median weekly family income Median weekly family income Proportion of family income required to pay loan
$2,021 23.6%
Australia wide $1,728 31.3% $2,118 19.8% $1,585 27.2%
$1,685 27.5% $1,727 36.5% $1,684
Repayments based on data for new borrowers
34.1% $1,425 24.5%
$2,677 19.7%
ACT