Housing affordability improved slightly in the March quarter in Western Australia, while the number of first home buyers and approved loans decreased.
Housing affordability improved slightly in the March quarter in Western Australia, while the number of first homebuyers and approved loans decreased, a report released today showed.
According to the Adelaide Bank and Real Estate Institute of Australia Housing Affordability Report, the proportion of income required to meet loan repayments decreased to 22.6 per cent, a reduction of 0.5 percentage points over the quarter and 1 percentage point over the previous year.
The number of first homebuyers decreased by 13.6 per cent in the March quarter and 7.4 per cent from March last year.
Loans also decreased sharply with a reduction of 9.3 per cent from the same quarter last year and 16.2 per cent over the March quarter.
The report showed rental affordability improved in the last quarter but has declined over the past year in WA.
The proportion of income required to pay median rent in the state decreased by 0.1 percentage points over the quarter to 16.5 per cent, which was 0.2 percentage points higher than in March 2018.
The WA housing market showed similar patterns to the rest of the country.
Housing affordability improved in all states and territories except the Northern Territory over the last quarter, with NSW recording a decrease of 1.3 per cent in the proportion of income required to pay rent.
There were less first homebuyers in every region, and the biggest decrease was in the Australian Capital Territory where 44.8 per cent fewer people applied for a loan as a first homebuyer.
Rental affordability also increased marginally in all states except for Tasmania and in South Australia.
Loans across the country also declined heavily to 86,909, a 20 per cent fall over the March quarter.
REIA president Adrian Kelly said this was not unusual for the first quarter of the calendar year, however, when compared with the same quarter of last year, the number of new loans declined by 13.7 per cent.
“The number of those entering the home loan market also declined over the year,” Mr Kelly said.
“Interestingly, while loan size decreased for changeover buyers, it increased marginally for first home buyers.”
My Kelly said the RBA’s decision yesterday to cut interest rates by 25 basis point rates will lead to further improvement in affordability.
“Subject to the banks passing on the full cut, for a first home buyer this means a saving of $70 per month based on an average loan size of $338,000 in the March quarter of 2019.”