Steady house prices and a less-than-desirable rental market could be behind our capital’s huge increase in the number of new loans and loans to first home buyers.
The stats, which were released last week in the latest Housing Affordability Report from Adelaide Bank and the Real Estate Institute of Australia, showed the ACT had the largest increase of loans to new home buyers of all states and territories – up by a whopping 34 per cent.
The ACT also took out top spot for the total number of new home loans (excluding refinancing), which increased by 24.1 per cent. This is compared to our NSW neighbours, which increased by just 2 per cent.
Our median weekly family income remains almost $1000 per week higher than the national average, at $2,727 and $1,765 respectively. The proportion of family income required to meet loan repayments is just 20.6 per cent (compared to 31.2 per cent Australia wide).
Average loan sizes and loan sizes to first home buyers also increased slightly, testament to our steady house prices compared to falling values in the two major cities where average loan sizes have dropped.
Overall, housing affordability did decline in most states and territories, with the percentage of family income required to meet loan repayments in the ACT increasing slightly by 0.9 per cent (compared to the September 2018 quarter). The percentage of family income needed to meet rental repayments increased by 0.5 per cent.
Bryan Dacey, Mobile Relationship Manager for Canberra Community Bank Group, says the marginal difference between income allocated to rental payments (18.9 per cent of family income) or owning your own home (20.6 per cent of family income) is a clear driver for many new home buyers.
“Rental affordability and availability in the ACT has often struggled, and with minimal difference between the income required to pay rent versus paying off your own home, it’s a step that makes sense for a lot of people.
“Since 2008, the cost to rent a house in the ACT has increased from around $400 to almost $550 per week. This shows rental returns are strong for investors, but it may not be the best option for those seeking to settle permanently in Canberra.”
Bryan notes that our fortunate weekly income combined with reasonable house prices places us near the top of the home loan affordability scale, making Canberra one of the best places in the country to buy a new home.
“The ACT tops almost every state and territory for home loan affordability at 48.4 per cent – almost double that of NSW which has the lowest affordability at 27.2 per cent.”
To chat with Bryan about securing a loan for a new home or investment property in the ACT, call him on 0435 532 740.
To learn more about banking with a local community bank, pop into any one of the Canberra Community Bank branches in:
Curtin: 1/20 Curtin Place, Curtin. Ph: 6260 5140
Jerrabomberra: 2a/2 Limestone Dr, Jerrabomberra. Ph: 6299 8357
Wanniassa: Wanniassa Shopping Centre, Sangster Place. Ph: 6231 9024
Calwell: Calwell Shopping Centre, Webber Crescent. Ph: 6291 3385
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