Aussie Home Affordability Improves

Posted on January 22nd, 2014 · Posted in News

A national study by the Real Estate Institute of Australia found less income was needed to meet mortgage repayments during the September quarter in 2013 with first-home buyers also flocking to the market to take advantage of lower interest rates.

In the three months to September 30, the proportion of income required to meet home loan repayments fell by 0.1 percentage points to 31.8%, marking the fifth consecutive quarter of affordability improvement.  Homes are more affordable than the corresponding period in 2011, when it took 34.4% of take-home pay to service a mortgage with in some parts of Australia it is cheaper to buy than rent.

Better affordability has led to more first home buyers taking up a mortgage, with their ranks swelling to 19% of the market in the September quarter, from 17.9% during the previous quarter.

The ACT continues to be Australia’s most affordable housing market, with just 18.9% of income needed to pay off a loan.  In NSW, 36.5% of pay was needed to meet mortgage repayments, and this state posted the biggest quarterly improvement in affordability.  Queensland and the Northern Territory also became more affordable during the September quarter.

The national improvement in housing affordability occurred as average home loans grew by 1% to $320,542, taking average monthly loan repayments to $2,176 or $544 a week.

During the same period, the Reserve Bank of Australia (RBA) left interest rates on hold at 3.5%.

Do you have your eye on your dream home, looking to downsize or upsize?  With interest rates at record lows and a review in the cash rate not due until February, now may be the best time to Strengthen Your Financial Future.  Contact us today for a FREE finance review.

 

 

 

 

Original Story Source :: ninemsn.com.au