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It might seem like the great Australian dream of owning a home is getting further and further out of reach for the average person, but a new report has found that the reverse might be closer to the truth.
The latest Housing Affordability Report, compiled by the Adelaide Bank and the Real Estate Institute of Australia (REIA) has revealed that housing affordability is actually at its best level in 3 years.
Data from the report showed that over the March 2016 quarter the proportion of income needed to meet loan repayments fell to 30 per cent, the lowest it has been since 2013.
The report also showed that compared to the final quarter of 2015, all states and territories saw some improvement in housing affordability with the exception of the Northern Territory where the amount of income required to meet mortgage repayments increased slightly by 0.7 per cent.
New South Wales saw the greatest improvements in housing affordability with the proportion of income required to meet loan repayments falling by 4 per cent to 35.4 per cent. However, NSW was still found to be the least affordable state for homebuyers.
While housing affordability does seem to be improving, it could still be better and according to Adelaide Bank general manager Damian Percy, current affordability levels are on the borderline of what is considered housing stress.
“The decrease in the national figure to 30 per cent is to be welcomed as this is now on the borderline of what has traditionally been viewed as the measure of ‘housing stress’,” Mr Percy said.
The housing market is also seeing a decline in first homebuyers across the country.
The report found that the national number of first homebuyers decreased by 16 per cent in the March 2016 quarter— a decrease of 2.4 per cent compared to the same quarter last year.
First-time buyers now make up 14.6 per cent of the owner-occupier market, the lowest level since the June quarter of 2004.
The average loan size to first homebuyers also decreased in every state and territory with the exception of Tasmania, which saw an 8.1 per cent increase, which appears to be having success with doubling its First Home Owners Grant to $20,000 until 30 June 2017.