Aussie homeowners witness rise in affordability — REIA

A study by the Real Estate Institute of Australia (REIA) found that homeowners performed better than renters in the first quarter of 2011. This is because all the states except for the Northern Territory have seen an improvement in housing affordability.

The greatest increases in housing affordability were seen in Victoria and New South Wales compared to the first quarter of last year. The income needed to repay a home-loan loan in Victoria decreased by 1.6 percentage point and 35.4%, respectively.

While rental affordability increased in Victoria and New South Wales, income requirements to settle rents rose in some states. This resulted in a decrease in rental affordability in Australia.

REIA president Adrian Kelly stated that while rental affordability was slightly better in New South Wales and Victoria, Queensland, Western Australia and Western Australia as well as the Northern Territory, Western Australia and Western Australia but there was a substantial decline in rental affordability for South Australia and Tasmania. This resulted in a decrease in national rental affordability.

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Below is a table that shows the income needed to pay rents and home-loans repayments in each state. You will notice that the percentage changes in the numbers are in parentheses.

First-home buyer participation

While housing affordability showed improvement, the number of loans — excluding refinancing — declined by 20% over the March quarter.

Kelly said that while this is normal for the first three quarters, the number loans declined 13.7% in comparison to the same quarter last year.

Also, the number of Australians who have entered home-loan marketplaces has declined significantly.

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For example, in New South Wales, the number of first-home buyer loans decreased by 24.22% over the past quarter, and 11% over last year. In Victoria, the home-loan demand from first-home buyers also weakened — down by 18.7% over the quarter and 11.9% in the year.

The Australian Capital Territory was the worst hit. This state issued 43% fewer loans to first-homebuyers than in the previous years.

Below is a table illustrating the decline in loans for first-homebuyers within each state.