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
Housing Affordability Report
The national snapshot
Rental affordability
Proportion of family income required to meet loan repayments
The Australian weighted average median rent for three-bedroom houses is calculated using Census data and median rents published in REIA Real Estate Market Facts.
Table 1 shows the proportion of family income needed to meet loan repayments Table 1: Proportion of family income needed to meet loan repayments Mar qtr 2018
Dec qtr 2017
Mar qtr 2017
NSW
36.5%
37.8%
36.2%
VIC
34.1%
33.4%
32.5%
QLD
27.5%
27.6%
26.7%
SA
27.2%
26.4%
26.2%
WA
23.6%
23.9%
23.4%
TAS
24.5%
25.7%
23.6%
NT
19.8%
20.9%
21.1%
ACT
19.7%
19.6%
20.1%
AUS
31.3%
31.6%
30.4%
In the March quarter 2018, rental affordability declined with the proportion of income required to meet rent payments increasing to 24.8%, an increase of 0.3 percentage points over the quarter and an increase of 0.1 percentage point compared to the same quarter 2017. Over the quarter, rental affordability declined in all states and territories except for an improvement in both Western Australia and the Northern Territory. When compared to the March quarter 2017, rental affordability improved in some states and territories but declined in others. Rental affordability improved in Queensland, South Australia, Western Australia and the Northern Territory; it declined in New South Wales, Tasmania and the Australian Capital Territory but was stable in Victoria.
Chart 1 shows the movement in the proportion of family income required to meet average home loan repayments since the June quarter 2000. Chart 2 shows the movement in rental affordability.
New South Wales continues to be the least affordable state or territory in Australia in which to rent a property. The State’s proportion of income required to meet rent repayments is 30.1%, 5.3 percentage points higher than the national level. Western Australia, where the proportion of income required to meet median rents decreased to 16.3%, has become the most affordable state or territory in which to rent a property.
Chart 1 Proportion of family income required to meet average loan repayments
Table 2 shows rental affordability expressed as the proportion of median weekly family income required to meet weekly rent for a three bedroom house.
45%
Table 2: Proportion of family income needed to meet rent payments
40%
35%
30%
25%
20%
2000
2002
2004
2006
2008
2010
2012
2014
2016
Chart 2 Proportion of family income required to meet average rent payments 30%
2018
Mar qtr 2018
Dec qtr 2017
Mar qtr 2017
NSW
30.1%
29.7%
29.0%
VIC
23.8%
23.6%
23.8%
QLD
23.1%
22.7%
23.7%
SA
22.4%
21.9%
22.6%
WA
16.3%
16.4%
17.6%
TAS
28.1%
26.8%
26.6%
NT
22.5%
23.1%
23.7%
ACT
18.5%
18.2%
17.9%
AUS
24.8%
24.5%
24.7%
fast facts
28%
Proportion of family income to meet Mar 2018
Dec 2017
Mar 2017
Home loan repayments
31.3%
31.6%
30.4%
Rent payments
24.8%
24.5%
24.7%
26%
24%
22%
20%
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
3
First home buyers
Factors influencing home loan affordability
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.
• 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.
The average loan size to first home buyers increased to $330,167 an increase of 0.5% over the quarter and an increase of 5.3% over the past twelve months. First home buyers now make up 17.8% of the owner-occupier market and, if refinancing is excluded, they make up 26.3% of the market. Chart 3a shows the first home buyers’ share of all dwellings financed and all dwellings financed (excluding refinancing) from the March quarter 2008 to the March quarter 2018.
Chart 4 shows the relationship between the Australian weighted average median house price, median weekly family income and average loan size.
Chart 4 Median house price and family income $1,800
Chart 3b shows the difference in average home loans for first home buyers compared to change-over buyers, which excludes refinancing.
$800
Family Income
$1,700
$600 $1,600 $400
Price ($000)
Chart 3a First home buyers share of dwellings financed
$1,000
$1,500
45%
$200
40% 35%
$1,400
30%
Mar-14
Mar-15
Median Weekly Family Income
25% 20%
Mar-16
Med Wtd Ave Price
Mar-17
Mar-18
$0
Ave Loan Size
Median House Prices
15% 10% 5%
0%
Mar-13
2008
2009
2010
2011
First Home buyers
2012
2013
2014
2015
2016
2017
2018
First home buyers (excl refinancing)
Detailed data on median prices for houses and other dwellings is available in the REIA Real Estate Market Facts publication, which will be released on June 13, 2018.
Chart 3b Average home loans for first and change-over buyers $450 $400 $350 $300 $250 $200
2008
2009
2010
2011
First home buyers
2012
2013
2014
2015
2016
2017
2018
Change-over buyers (excl. refinancing)
4
The weighted average capital city median house price decreased to $770,270, a decrease of 0.1% over the March quarter but an increase of 2.2% over the past twelve months. The median house price decreased in all capital cities except Melbourne, Hobart and Darwin.
Housing Affordability Report Median family income and average monthly loan repayments
Chart 5 Quarterly interest rates
The national median weekly family income increased to $1,728, an increase of 0.5% during the March quarter and an increase of 2.4% compared to the same quarter 2017.
7%
During the March quarter 2018, the average monthly loan repayment decreased to $2,345, a decrease of 0.6% over the quarter but an increase of 5.5% compared to the corresponding quarter 2017.
5%
The proportion of family income required to meet loan repayments decreased to 31.3% during the March quarter 2018, a decrease of 0.3 percentage points over the previous quarter.
Average loan (all borrowers) The total number of loans (excluding refinancing) decreased to 100,748, a decrease of 16.0% over the quarter and a decrease of 2.7% compared to the same quarter last year. The average loan size decreased to $396,910, a decrease of 0.5% over the March quarter but an increase of 6.5% since the March quarter 2017.
Interest rates During the March quarter, the Reserve Bank of Australia (RBA) left the official cash rate at 1.5%. The gap between variable and three-year fixed rates was 1.0 percentage points. The March quarterly average variable standard interest rate remained stable at 5.2% over the quarter, but a decrease of 0.1 percentage point when compared to the corresponding quarter 2017. The quarterly average three-year fixed rate increased to 4.2% during the quarter. Average quarterly variable interest rates were: Banks – 5.2%, the same as the previous quarter. Permanent Building Societies – 4.6%, a decrease of 0.1 percentage point over the quarter. Other lenders – 3.7%, the same as the previous quarter. The average fixed (3 year) interest rates were: Banks – 4.2%, an increase of 0.1 percentage ponts over the previous quarter. Permanent Building Societies – 4.1%, the same as the previous quarter. Other lenders – 4.0%, the same as the previous quarter. Chart 5 shows the movement of the RBA cash rate, the quarterly average standard variable rate and the quarterly average threeyear fixed rate over the last five years.
6%
4% 3% 2% 1% 0% Mar-13
Mar-14
Mar-15
Variable rate
Mar-16
3yr fixed rate
Mar-17
Mar-18
RBA cash rate
The 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 3 shows the HLAI for Australia and each state and territory for the March quarter 2018 and is compared with the preceding quarter and the corresponding quarter 2017. Percentage changes are shown in Table 4. A long-term series of the quarterly movements in the HLAI is shown in Chart 6.
Table 3: Home loan affordability indicator Mar qtr 2018
Dec qtr 2017
Mar qtr 2017
NSW
27.4
26.5
27.6
VIC
29.3
29.9
30.7
QLD
36.4
36.3
37.4
SA
36.8
37.8
38.2
WA
42.3
41.9
42.8
TAS
40.8
38.9
42.4
NT
50.4
47.9
47.4
ACT
50.8
51.0
49.7
AUS
31.9
31.6
32.9
5
Table 4: Percentage change in HLAI
Table 5: Australia
Quarterly change
Annual change
NSW
3.4%
-0.7%
VIC
-2.0%
-4.6%
QLD
0.3%
-2.7%
SA
-2.6%
-3.7%
WA
1.0%
-1.2%
TAS
4.9%
-3.8%
NT
5.2%
6.3%
ACT
-0.4%
AUS
0.9%
Mar 2018
Dec 2017
Mar 2017
Home Loan Affordability Indicator (HLAI)
31.9
31.6
32.9
Average HLAI since December quarter 1996
32.6
32.6
32.6
Proportion of family income devoted to meeting average loan repayments
31.3%
31.6%
30.4%
24.8%
24.5%
24.7%
2.2%
Proportion of family income devoted to meeting median rents
-3.0%
Median weekly family income
$1,728
$1,720
$1,688
Average monthly loan repayment
$2,345
$2,358
$2,222
Average loan
$396,910
$399,044
$372,839
Total number of loans (excl refinancing)
100,748
119,937
103,547
Number of loans to first home buyers
26,458
30,932
20,670
$330,167
$328,500
$313,600
Standard variable interest rate
5.2%
5.2%
5.3%
Fixed interest rate
4.2%
4.1%
4.3%
Standard variable interest rate
4.6%
4.7%
4.4%
Fixed interest rate
4.1%
4.1%
4.1%
3.7%
3.7%
3.8%
Fixed interest rate
4.0%
4.0%
4.0%
Percentage change
HLAI
CPI
Since previous quarter
0.9%
0.4%
Since corresponding quarter last year
-3.0%
1.9%
Chart 6 Home loan affordability indicator over time 45%
40%
Average first home buyer loan
Banks
35%
30%
Building societies
25%
20%
1997
2000
2003
2006
2009
2012
2015
2018
A long-term series of the quarterly movements in the Australian CPI and the weighed average median three bedroom house rent for the eight Australian capital cities are shown in Chart 7.
Chart 7 Australian rent and CPI 180%
% increase since March 1994
160% 140% 120%
100% 80% 60% 40% 20%
0%
1994 1996 1998 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018
Weighted Median Rent index
6
Consumer Price Index (CPI)
Other lenders Standard variable interest rate
Housing Affordability Report
State by state
Table 6: New South Wales
New South Wales Over the March quarter, housing affordability in New South Wales improved with the proportion of income required to meet loan repayments decreasing to 36.5%, a decrease of 1.3 percentage points over the quarter but an increase of 0.3 percentage points compared with the corresponding quarter 2017. With the proportion of income required to meet loan repayments 5.3 percentage points higher than the nation’s average, New South Wales remained the least affordable state or territory in which to buy a home. Rental affordability, however, declined in New South Wales over the March quarter with the proportion of income required to meet median rent payments increasing to 30.1%, an increase of 0.4 percentage points over the March quarter and an increase of 1.1 percentage points compared to the same quarter last year. In New South Wales, the number of loans to first home buyers decreased to 6,501, a decrease of 13.4% over the quarter but an increase of 80.8% compared to the March quarter 2017. Of the total number of first home buyers that purchased during the March quarter, 24.6% were from New South Wales while first home buyers make up 22.4% of the State’s owneroccupier market. The average loan to first home buyers increased to $371,333, an increase of 0.5% over the quarter and an increase of 2.8% compared to the same quarter last year.
Mar 2018
Dec 2017
Mar 2017
Home Loan Affordability Indicator (HLAI)
27.4
26.5
27.6
Average HLAI since December quarter 1996
28.2
28.2
28.3
Proportion of family income devoted to meeting average loan repayments
36.5%
37.8%
36.2%
Proportion of family income devoted to meeting median rents
30.1%
29.7%
29.0%
Median weekly family income
$1,727
$1,719
$1,688
Average monthly loan repayment
$2,731
$2,816
$2,645
$462,239
$476,478
$443,762
Total number of loans (excl refinancing)
28,961
35,277
29,261
Number of loans to first home buyers
6,501
7,509
3,596
$371,333
$369,633
$361,333
Percentage Change
HLAI
CPI
Since previous quarter
3.4%
0.3%
Since corresponding quarter last year
-0.7%
2.1%
Average loan
Average first home buyer loan
The number of loans (excluding refinancing) in New South Wales decreased to 28,961, a decrease of 17.9% over the quarter and a decrease of 1.0% compared to the March quarter 2017. The average loan size decreased to $462,239, a decrease of 3.0% over the quarter but an increase of 4.2% compared to the corresponding quarter last year. New South Wales has the largest average loan size across the country.
Chart 9 Median rents Sydney
Chart 8 New South Wales HLAI 40
$600 $550 $500 Rent per week
HLAI
30
20
10
$450 $400 $350 $300
$250 0
Mar-14
Mar-15
Quarterly value
Mar-16
20 year average
Mar-17
Mar-18
10 year average
$200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Australian(wt) Houses Other dwellings
fast facts Housing affordability improved in NSW with loan repayments decreasing by 1.3 percentage points.
7
Victoria
Table 7: Victoria
Over the March quarter, housing affordability declined in Victoria with the proportion of income required to meet loan repayments increasing to 34.1%, an increase of 0.7 percentage points over the quarter and an increase of 1.6 percentage points compared to the same quarter of the previous year.
Mar 2018
Dec 2017
Mar 2017
Home Loan Affordability Indicator (HLAI)
29.3
29.9
30.7
Average HLAI since December quarter 1996
33.1
33.2
33.3
Rental affordability in Victoria has also declined over the quarter with the proportion of income required to meet median rent increasing to 23.8%, an increase of 0.2 percentage points. However, since the March quarter 2017, rental affordability has remained steady.
Proportion of family income devoted to meeting average loan repayments
34.1%
33.4%
32.5%
Proportion of family income devoted to meeting median rents
23.8%
23.6%
23.8%
The number of loans to first home buyers in Victoria decreased to 8,169, a decrease of 17.9% over the quarter but an increase of 35.3% compared to the March quarter 2017. Of the total number of first home buyers that purchased during the March quarter, 30.9% were from Victoria while first home buyers make up 28.4% of the State’s owneroccupier market. In the March quarter 2018, the average loan to first home buyers was $347,733, an increase of 1.6% over the quarter and an increase of 7.6% compared to the March quarter 2017
Median weekly family income
$1,684
$1,674
$1,639
Average monthly loan repayment
$2,489
$2,426
$2,311
$421,341
$410,668
$387,676
Total number of loans (excl refinancing)
28,784
35,051
28,083
Number of loans to first home buyers
8,169
9,892
6,036
$347,733
$342,167
$323,300
In Victoria, the total number of loans (excluding refinancing) decreased to 28,784, a decrease of 17.9% during the quarter but an increase of 2.5% compared to the March quarter 2017. The average loan size was $421,341 over the quarter, an increase of 2.6%, and an increase of 8.7% when compared to the corresponding quarter 2017.
Percentage Change
HLAI
CPI
Since previous quarter
-2.0%
0.9%
Since corresponding quarter last year
-4.6%
2.2%
Average loan
Average first home buyer loan
Chart 11 Median rents Melbourne
Chart 10 Victoria HLAI 40
$550 $500 $450 Rent per week
HLAI
30
20
10
$400 $350 $300 $250
$200 0
Mar-14
Mar-15
Quarterly value
Mar-16
20 year average
Mar-17
Mar-18
10 year average
$150 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Australian(wt) Houses Other dwellings
fast facts Both housing affordability and rental affordability declined in Victoria over the March quarter.
8
Housing Affordability Report Queensland
Table 8: Queensland
Housing affordability improved marginally in Queensland over the March quarter with the proportion of income required to meet home loan repayments decreasing to 27.5%, a decrease of 0.1 percentage point over the quarter but an increase of 0.8 percentage points compared to the same quarter last year.
Mar 2018
Dec 2017
Mar 2017
Home Loan Affordability Indicator (HLAI)
36.4
36.3
37.4
Average HLAI since December quarter 1996
34.1
34.1
34.0
Rental affordability in Queensland declined over the quarter with the proportion of the median family income required to meet the median rent increasing to 23.1%, an increase of 0.4 percentage points over the quarter but a decrease of 0.6 percentage points compared to the same quarter 2017.
Proportion of family income devoted to meeting average loan repayments
27.5%
27.6%
26.7%
Proportion of family income devoted to meeting median rents
23.1%
22.7%
23.7%
Median weekly family income
$1,685
$1,677
$1,644
Over the March quarter, the number of loans to first home buyers in Queensland decreased to 5,639, a decrease of 14.7% over the quarter but an increase of 5.0% compared to the same quarter of 2017. Of all Australian first home buyers over the quarter, 21.3% were from Queensland while the proportion of first home buyers of the State’s owner-occupier market was 26.7%. The average loan size to first home buyers increased to $293,000, an increase of 0.5% during the quarter and a corresponding increase of 0.5% compared to the March quarter 2017.
Average monthly loan repayment
$2,007
$2,002
$1,904
$339,797
$338,778
$319,411
Total number of loans (excl refinancing)
21,124
24,401
22,597
Number of loans to first home buyers
5,639
6,614
5,371
$293,000
$291,400
$291,567
Percentage Change
HLAI
CPI
Since previous quarter
0.3%
0.1%
Since corresponding quarter last year
-2.7%
1.7%
The number of loans (excluding refinancing) decreased in Queensland to 21,124, a decrease of 13.4% over the quarter and a decrease of 6.5% compared to the March quarter of the previous year. The average loan size increased to $339,797, an increase of 0.3% during the quarter and an increase of 6.4% compared to the March quarter 2017.
Average loan
Average first home buyer loan
Chart 13 Median rents Brisbane
Chart 12 Queensland HLAI
$550
50
$500 $450 Rent per week
HLAI
40
30
20
10
0
$400 $350 $300 $250
$200
Mar-14
Mar-15
Quarterly value
Mar-16
20 year average
Mar-17
Mar-18
10 year average
$150 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Australian(wt) Houses Other dwellings
fast facts Housing affordability improved while rental affordability declined in Queensland.
9
South Australia
Table 9: South Australia
Over the March quarter, housing affordability in South Australia declined with the proportion of income required to meet monthly loan repayments increasing to 27.2%, an increase of 0.8 percentage points over the quarter and an increase 1.0 percentage points compared to the March quarter 2017.
Mar 2018
Dec 2017
Mar 2017
Home Loan Affordability Indicator (HLAI)
36.8
37.8
38.2
Average HLAI since December quarter 1996
38.7
38.7
38.7
Rental affordability in South Australia also declined over the quarter with the proportion of income required to meet rent payments increasing to 22.4%, an increase of 0.5 percentage points over the quarter but a decrease of 0.2 percentage points compared to the March quarter 2017.
Proportion of family income devoted to meeting average loan repayments
27.2%
26.4%
26.2%
Proportion of family income devoted to meeting median rents
22.4%
21.9%
22.6%
Median weekly family income
$1,585
$1,575
$1,545
Over the March quarter, the number of loans to first home buyers in South Australia decreased to 1,297, a decrease of 13.7% over the quarter but an increase of 7.5% compared to the March quarter 2017. Of all Australian first home buyers over the quarter, 4.9% were from South Australia while the proportion of first home buyers in the state’s owner-occupier market was 19.6%. The average loan size to first home buyers increased to $280,967, an increase of 4.0% over the quarter and an increase of 6.1% when compared to a year earlier.
Average monthly loan repayment
$1,868
$1,805
$1,752
$316,213
$305,360
$293,851
Total number of loans (excl refinancing)
6,634
7,629
7,219
Number of loans to first home buyers
1,297
1,503
1,206
$280,967
$270,100
$264,867
Percentage Change
HLAI
CPI
Since previous quarter
-2.6%
0.4%
Since corresponding quarter last year
-3.7%
2.3%
In South Australia, the total number of loans (excluding refinancing) decreased to 6,634, a decrease of 13.0% over the quarter and a decrease of 8.1% compared to the March quarter 2017. The average loan size increased to $316,213, an increase of 3.6% over the quarter and an increase of 7.6% compared to the same time last year.
Average loan
Average first home buyer loan
Chart 15 Median rents Adelaide
Chart 14:South Australia HLAI 50
$550 $500 $450
30
Rent per week
HLAI
40
20
10
0
$400 $350 $300 $250
$200 Mar-14
Mar-15
Quarterly value
Mar-16
20 year average
Mar-17
Mar-18
10 year average
$150 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Australian(wt)
Houses
Other dwellings
fast facts South Australia had the largest increase in
average loan amount (3.6%).
10
Housing Affordability Report Western Australia
Table 10: Western Australia
Over the March quarter, housing affordability in Western Australia improved with the proportion of income required to meet loan repayments decreasing to 23.6%, a decrease of 0.3 percentage points over the quarter but an increase of 0.2 percentage points compared to the March quarter 2017.
Mar 2018
Dec 2017
Mar 2017
Home Loan Affordability Indicator (HLAI)
42.3
41.9
42.8
Average HLAI since December quarter 1996
38.6
38.5
38.4
Rental affordability in Western Australia also improved during the March quarter with the proportion of family income required to meet the median rent decreasing marginally to 16.3%, a decrease of 0.1 percentage point over the quarter and a decrease of 1.3 percentage points compared to the year before.
Proportion of family income devoted to meeting average loan repayments
23.6%
23.9%
23.4%
Proportion of family income devoted to meeting median rents
16.3%
16.4%
17.6%
Median weekly family income
$2,021
$2,014
$1,987
The number of first home buyers in Western Australia decreased to 3,578 in the March quarter, a decrease of 10.5% over the quarter but an increase of 0.5 percentage points compared to the same time last year. Of all Australian first home buyers over the quarter, 13.5% were from Western Australia while the proportion of first home buyers in the state’s owner-occupier market was 35.1%. The average loan to first home buyers decreased to $308,033, a decrease of 2.5% over the quarter but remained stable when compared to the March quarter 2017.
Average monthly loan repayment
$2,071
$2,085
$2,014
$350,545
$352,796
$337,922
Total number of loans (excl refinancing)
10,188
11,744
11,320
Number of loans to first home buyers
3,578
3,996
3,559
$308,033
$316,067
$307,933
Percentage Change
HLAI
CPI
Since previous quarter
1.0%
0.1%
Since corresponding quarter last year
-1.2%
0.9%
The total number of loans (excluding refinancing) in Western Australia decreased to 10,188, a decrease of 13.2% over the quarter and a decrease of 10.0% compared to the same time last year. The average loan size decreased to $350,545, a decrease of 0.6% over the quarter but an increase of 3.7% compared to the March quarter 2017.
Average first home buyer loan
Chart 17 Median rents Perth
50
$500
40
$450 $400
30
Rent per week
HLAI
Chart 16 Western Australia HLAI
Average loan
20
10
0
$350 $300 $250
Mar-14
Mar-15
Quarterly value
Mar-16
20 year average
Mar-17
Mar-18
10 year average
$200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Australian(wt) Houses Other dwellings
fast facts
Western Australia had improvements in both rental and housing affordability over the March quarter.
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Tasmania Housing affordability in Tasmania improved over the March quarter with the proportion of income required to meet home loan repayments decreasing to 24.5%, a decrease of 1.2 percentage points over the quarter but an increase of 0.9 percentage points from the March quarter 2017.
Table 11: Tasmania Mar 2018
Dec 2017
Mar 2017
Home Loan Affordability Indicator (HLAI)
40.8
38.9
42.4
Average HLAI since December quarter 1996
41.9
41.9
42.0
Rental affordability in Tasmania, however, declined over the quarter with the proportion of income required to meet median rents increasing to 28.1%, an increase of 1.3 percentage points over the quarter and an increase of 1.5 percentage points compared with the March quarter 2017.
Proportion of family income devoted to meeting average loan repayments
24.5%
25.7%
23.6%
Proportion of family income devoted to meeting median rents
28.1%
26.8%
26.6%
Median weekly family income
$1,425
$1,417
$1,389
The number of first home buyers in Tasmania decreased to 420, a decrease of 5.0% over the quarter but an increase of 6.9% compared to the same quarter of the previous year. Of all Australian first home buyers over the quarter, 1.6% were from Tasmania while the proportion of first home buyers in the state’s owner-occupier market was 19.6%. The average loan to first home buyers increased to $244,900, a decrease of 2.6% over the quarter but an increase of 1.9% compared to the same quarter 2017.
Average monthly loan repayment
$1,512
$1,577
$1,420
$255,907
$266,839
$238,252
2,148
2,366
2,275
420
442
393
$244,900
$251,333
$240,333
Percentage Change
HLAI
CPI
Since previous quarter
4.9%
0.7%
Since corresponding quarter last year
-3.8%
2.0%
The total number of new loans (excluding refinancing) in Tasmania decreased to 2,148, a decrease of 9.2% over the quarter, and a decrease of 5.6% compared to the corresponding quarter 2017. The average loan size decreased to $255,907, a decrease of 4.1% over the quarter but an increase of 7.4% compared to the same time last year. Tasmania continues to have the lowest average loan size across the country.
Average loan Total number of loans (excl refinancing) Number of loans to first home buyers Average first home buyer loan
Chart 19 Median rents Hobart
Chart 18 Tasmania HLAI 50
$500 $450 $400
30
Rent per week
HLAI
40
20
10
0
$350 $300 $250
Mar-14
Mar-15
Quarterly value
Mar-16
20 year average
Mar-17
Mar-18
10 year average
$200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Australian(wt) Houses Other dwellings
fast facts Tasmania had the largest decline in rental affordability.
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Housing Affordability Report Northern Territory Housing affordability in the Northern Territory improved with the proportion of income required to meet loan repayments decreasing to 19.8% in the March quarter, a decrease of 1.1 percentage points over the quarter and a decrease of 1.3 percentage points when compared to the March quarter 2017.
Table 12: Northern Territory Mar 2018
Dec 2017
Mar 2017
Home Loan Affordability Indicator (HLAI)
50.4
47.9
47.4
Average HLAI since December quarter 1996
42.2
42.1
41.9
Rental affordability in the Northern Territory also improved over the quarter with the proportion of income required to meet the median rent decreasing to 22.5%, a decrease of 0.6 percentage points over the quarter and 1.2 percentage points compared to the March quarter 2017.
Proportion of family income devoted to meeting average loan repayments
19.8%
20.9%
21.1%
Proportion of family income devoted to meeting median rents
22.5%
23.1%
23.7%
Median weekly family income
$2,118
$2,113
$2,086
The number of loans to first home buyers in the Northern Territory decreased to 166, a decrease of 21.0% over the March quarter but an increase of 29.7% compared to the March quarter 2017. Of all Australian first home buyers over the quarter, 0.6% were from the Northern Territory while the proportion of first home buyers in the Territory’s owner-occupier market was 27.0%. The average loan size to first home buyers decreased to $278,300, a decrease of 5.9% over the quarter and a decrease of 10.5% compared to the same time last year.
Average monthly loan repayment
$1,820
$1,912
$1,905
$308,039
$323,467
$319,624
Total number of loans (excl refinancing)
614
702
649
Number of loans to first home buyers
166
210
128
$278,300
$295,667
$311,067
Percentage Change
HLAI
CPI
Since previous quarter
5.2%
0.0%
Since corresponding quarter last year
6.3%
1.1%
The number of new loans (excluding refinancing) in the Northern Territory decreased to 614, a decrease of 12.5% over the quarter and a decrease of 5.4% compared to the March quarter 2017. The average loan size decreased to $308,039, a decrease of 4.8% over the quarter and a decrease of 3.6% compared to the March quarter 2017.
Average first home buyer loan
Chart 21 Median rents Darwin
Chart 20 Northern Territory HLAI 50
$700
40
$600
30
$500
Rent per week
HLAI
Average loan
20
$300
10
0
$400
Mar-14
Mar-15
Quarterly value
Mar-16
20 year average
Mar-17
Mar-18
10 year average
$200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Australian(wt) Houses Other dwellings
fast facts
Northern Territory had the largest decrease in the number first home buyer loans over the quarter.
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Australian Capital Territory
Table 13: Australian Capital Territory
Housing affordability in the Australian Capital Territory declined slightly over the March quarter with the proportion of income required to meet home loan repayments increasing to 19.7%, an increase of 0.1 percentage point over the quarter but a decrease of 0.4 percentage points compared to the same quarter last year.
Mar 2018
Dec 2017
Mar 2017
Home Loan Affordability Indicator (HLAI)
50.8
51.0
49.7
Average HLAI since December quarter 1996
47.0
46.9
46.7
Rental affordability in the Australian Capital Territory also declined over the March quarter with the proportion of income required to meet the median rent increasing to 18.5%, an increase 0.3 percentage points over the quarter and an increase of 0.6 percentage points compared to the March quarter 2017.
Proportion of family income devoted to meeting average loan repayments
19.7%
19.6%
20.1%
Proportion of family income devoted to meeting median rents
18.5%
18.2%
17.9%
Median weekly family income
$2,677
$2,664
$2,619
The number of loans to first home buyers in the Australian Capital Territory decreased to 688, a decrease of 10.2% over the quarter but an increase of 80.6% compared to the March quarter 2017. Of all Australian first home buyers over the quarter, 2.6% were from the Australian Capital Territory while the proportion of first home buyers in the Territory’s owner-occupier market was 30.0%. The average loan for first home buyers increased to $308,700, an increase of 2.8% over the quarter and an increase of 0.9% compared to the corresponding quarter 2017.
Average monthly loan repayment
$2,284
$2,262
$2,282
$386,635
$382,841
$382,909
2,295
2,767
2,143
688
766
381
$308,700
$300,433
$305,900
Percentage Change
HLAI
CPI
Since previous quarter
-0.4%
0.8%
Since corresponding quarter last year
2.2%
2.4%
The number of loans (excluding refinancing) in the Australian Capital Territory decreased to 2,295, a decrease of 17.1% over the quarter but an increase of 7.1% compared to the March quarter 2017. The average loan size increased to $386,635, an increase of 1.0% over the quarter and a corresponding increase of 1.0% compared to the March quarter 2017.
Total number of loans (excl refinancing) Number of loans to first home buyers Average first home buyer loan
Chart 23 Median rents Canberra
Chart 22 Australian Capital Territory HLAI 60
$500
50
$450
40
$400 Rent per week
HLAI
Average loan
30
20
$300 $250
10 0
$350
Mar-14
Mar-15
Quarterly value
Mar-16
20 year average
Mar-17
Mar-18
10 year average
$200 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Australian(wt) Houses Other dwellings
fast facts ACT had the largest annual increase in the number of new loans (7.1%).
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Housing Affordability Report
Housing Affordability Report 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. 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. Loans: Average size and total number for first home buyers and all borrowers (excluding refinancing) 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, and financial institutions across Australia. From the June quarter 2012, 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 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 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 2600 Phone: (02) 6282 4277 Fax: (02) 6285 2444 Website: www.reia.asn.au Email: reia@reia.com.au
Adelaide Bank Adelaide Bank is a leading customer connected business, operating for more than 100 years. 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: 1300 652 220 overseas: +61 8 8300 6000 www.adelaidebank.com.au 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. © 2018 REAL ESTATE INSTITUTE OF AUSTRALIA ISSN: 1447 6606 Registered by Australia Post. Publication No. PP 299436/00045
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