housing affordability affordability report report december … har dec16.pdf · compared to the...

Housing Affordability Report

Australia wide

ACT

Median weekly family incomeProportion of family income required to pay loan

$1,983

$2,078

$1,535 $1,680

$1,636

$1,629

$2,608

$1,681

23.3%

21.6%

25.5% 37.0%

26.8%

31.8%

19.7%

30.4%

23.2%$1,381

Repayments based on data for new borrowers

December quarter 2016

HousingAffordability Report

State of the nationThe December quarter 2016 showed a slight decline in housing affordability nationally with the proportion of income required to meet loan repayments increasing to 30.4%, an increase of 0.9 percentage points over the quarter but a decrease of 1.9 percentage points compared to the corresponding quarter of 2015.

Over the quarter, housing affordability worsened in all states and territories.

Compared to the December quarter 2015, however, housing affordability improved across the country except in the Northern Territory.

Cash rateDuring the December quarter, the Reserve Bank of Australia (RBA) maintained the official cash rate at 1.5%. The quarterly average variable standard interest rate remained at 4.7%. The quarterly average three-year fixed rate increased to 4.1%, an increase of 0.1 percentage points.

First home buyersThe number of first home buyers increased to 23,273, an increase of 6.6% during the quarter and an increase of 0.5% compared to the December quarter 2015.

First home buyers now make up 13.8% of the owner-occupier market and, if refinancing is excluded, the figure currently sits at 20.7%. The number of first home buyers increased in all states and territories over the December quarter 2016.

Compared to the corresponding quarter 2015, the number of first home buyers went up in all states and territories except New South Wales, Western Australia and the Australian Capital Territory with largest increase of 29.9% in the Northern Territory and the largest drop of 11.3% in Western Australia. The average loan size to first home buyers increased by 1.3% over the December quarter and decreased by 1.5% over the past twelve months, to $323,633.

Over the quarter, the average loan size to first home buyers increased in New South Wales, Victoria, Western Australia and Northern Territory.

Compared to twelve months ago, the average loan size to first home buyers increased in New South Wales, Queensland and the Northern Territory.

Lending trendsThe total number of loans (excluding refinancing) increased to 112,781, an increase of 7.1% over the December quarter and a 3.2% decline compared to the same quarter of the previous year.

Over the quarter, all states and territories recorded increases in the total number of loans (excluding refinancing).

Compared to the corresponding quarter 2015, except for South Australia, Tasmania and the Northern Territory, all states and territories recorded decreases in the number of loans.

Over the December quarter, the average loan size increased to $389,254, an increase of 3.8% over the quarter and a decrease of 1.4% compared to a year ago.

During the quarter, the average loan size increased in all states and territories.

Compared to the December quarter 2015, the average loan size increased in Queensland, South Australia, Western Australia, Tasmania, Northern Territory and the Australian Capital Territory.

Proportion of family income required to meet loan repayments & median weekly family income

Housing affordability declined in all states and territories over the December quarter

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President’s message December 2016

Sponsor’s message

Housing affordability is an issue that has apparently crept up on our elected representatives with all the speed of a glacier over many years - at all three levels of government. So it was good to see the Victorian Government move with relative alacrity to recently announce that 100,000 new housing blocks would be rezoned to create 17 new suburbs in Melbourne by years’ end. That’s a start.

Supply is a big part of the problem and it is to be hoped that other State governments will follow suit. Increased Commonwealth assistance

is also required to speed up the construction of, and ease the burden on infrastructure that is already stretched to the limit so that people can easily get to and from these new suburbs without putting another three or four cars per household on the roads.

Population pressure is also part of the problem and I believe that most people will accept a growing population, provided their roads are not constantly clogged and tempers fraying with crowded public transport, bursting schools and hospitals stretched to the limit with patients on trolleys in corridors due to lack of capacity. This is really what’s at the heart of what ticks people off in the big cities.

Fix the friction, improve the opportunities to attain home ownership and introduce policies for older Australians to ‘right-size’ their homes - and we’ll all get along just fine. Home

ownership provides connection to community, a sense of place and stability for family and is, for many, a form of forced saving.

Policymakers are well aware that all the modelling for adequacy of income in retirement assumes that people actually own their own home and yet for many, the home ownership dream is slipping further out of sight. Home ownership is the third leg of the stool, along with superannuation and affordable healthcare that enables people to enjoy a secure and dignified retirement. The welcome news is that the number of first home buyers has increased by more than six per cent during the quarter and half a per cent compared to the same quarter last year. Any continuing turnaround in these numbers however is expected to be as glacial as the original ‘boiling frog’ failure to notice by our elected representatives over many years at all levels.

The affordability issue is at least now getting some serious traction and long-term data publications such as this play a useful role in encouraging and informing debate and tracking movement over time, regardless of the politics.

For our part, Adelaide Bank strives to build strong relationships with mortgage brokers and their customers to minimise the stress and hassle - because buying a house is one of the biggest decisions people will ever make. Our aim is to make the property ownership journey as easy and enjoyable as possible by offering affordable, simple, easy to understand products that can help you or someone you know Realise their property ownership dream sooner.

Damian Percy General Manager Adelaide Bank

This December quarter edition of the Adelaide Bank/REIA Housing Affordability Report shows that both housing affordability and rental affordability have declined during the fourth quarter of 2016.

Over the quarter, the proportion of the median family income required to meet average loan repayments increased by 0.9 percentage points to 30.4% and the proportion required to meet rent payments increased by 0.2 percentage points to 24.4%. Whilst

rental affordability declined for the quarter, for the 12 months to December it improved. Since mid 2012 rental affordability has been showing a trend improvement reflecting the pick up in investment in housing from the end of 2011.

While, for the quarter, housing affordability declined in all states and territories, rental affordability declined in New South Wales, Victoria, Western Australia, Tasmania and the

Australian Capital Territory but improved in Queensland, South Australia and the Northern Territory.

The number of first home buyers increased in all states and territories over the quarter. First home buyers now make up 13.8 per cent of total owner occupied housing. This rate has been dropping steadily over the past 5 years yet seems to have stabilised over the past 12 months. However, the size of the average loan for first home buyers increased by 1.3% over the December quarter to $323,633, but below the peak in the December quarter 2015.

While the increase in first home buyers is good news, this is offset by the increase in average loans. The REIA is concerned that if this trend in average loans for first home buyers continues, then the proportion of first home buyers in the market will continue at historically low rates.

Malcolm Gunning REIA President


3

The national snapshotProportion of family income required to meetloan repaymentsTable 1 shows the proportion of family income needed to meet loan repayments

Table 1: Proportion of family income needed to meet loan repayments

Dec qtr 2016 Sep qtr 2016 Dec qtr 2015NSW 37.0% 35.5% 39.4%

VIC 31.8% 30.9% 34.6%

QLD 26.8% 26.6% 27.6%

SA 25.5% 25.2% 27.1%

WA 23.3% 22.8% 24.0%

TAS 23.2% 22.8% 23.7%

NT 21.6% 19.6% 21.2%

ACT 19.7% 19.1% 19.9%

AUS 30.4% 29.5% 32.4%

Chart 1 shows the movement in the proportion of family incomerequired to meet average home loan repayments since the September quarter 1999. Chart 2 shows the movement in rental affordability.

Table 2: Proportion of family income needed to meet rent payments

Dec qtr 2016 Sep qtr 2016 Dec qtr 2015NSW 28.6% 28.1% 27.9%

VIC 23.3% 22.9% 23.5%

QLD 23.2% 23.4% 23.7%

SA 22.2% 22.4% 22.4%

WA 19.2% 19.2% 20.6%

TAS 25.3% 24.0% 24.6%

NT 24.5% 24.7% 26.8%

ACT 17.6% 17.3% 16.8%

AUS 24.4% 24.2% 24.6%

Rental affordability

The Australian weighted average median rent for three-bedroom houses is calculated using Census data and median rents published in REIA Real Estate Market Facts.

In the December quarter 2016, rental affordability declined with the proportion of income required to meet rent payments increasing to 24.4%, an increase of 0.2 percentage points over the quarter 2016 but a decrease of 0.2 percentage points compared to the same quarter 2015.

Over the quarter, rental affordability improved in Queensland, South Australia and the Northern Territory where the proportion of income required to meet median rents in each decreased by 0.2 percentage points.

When compared to the December quarter 2015, Victoria, Queensland, South Australia, Western Australia and the Northern Territory recorded improvements in rental affordability.

New South Wales is the least affordable state or territory in Australia in which to rent a property. The State’s proportion of income required to meet rent repayments is 28.6%, 2.2 percentage points higher than the national level. The Australian Capital Territory, where the proportion of income required to meet median rents increased by 0.3 percentage points to 17.6%, remained the most affordable state or territory in which to rent a property.

Table 2 shows rental affordability expressed as the proportion of median weekly family income required to meet weekly rent for a three bedroom house.

Chart 1 Proportion of family income required to meet average loan repayments

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Chart 2 Proportion of family income required to meet average rent payments

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fast factsProportion of family income to meet

Dec 2016 Sep 2016 Dec 2015Home loan repayments 30.4% 29.5% 32.4%

Rent payments 24.4% 24.2% 24.6%

4

First home buyers

The number of first home buyers increased to 23,273, an increase of 6.6% during the quarter and an increase of 0.5% compared to the December quarter 2015.

The average loan size to first home buyers increased to $323,633, an increase of 1.3% over the December quarter and a decrease of 1.5% over the past twelve months.

First home buyers now make up 13.8% of the owner-occupier market and, if refinancing is excluded, they make up 20.7% of the market.

Chart 3a shows the first home buyers’ share of all dwellings financed and all dwellings financed (excluding refinancing) from the December quarter 2006 to the December quarter 2016.

Chart 3b shows the difference in average home loans for first home buyers compared to change-over buyers, which excludes refinancing.

Factors influencing home loan affordability• The amount to be borrowed reflects the price of the property being purchased and the borrower’s equity situation.• The size of the loan, interest rates and the period of the loandetermine the average loan repayment.• The ability to repay the mortgage depends upon the family income.

Chart 4 shows the relationship between the Australian weightedaverage median house price, median weekly family income andaverage loan size.

Median House PricesThe weighted average capital city median house price increased to $742,788, an increase of 1.4% over the December quarter and an increase of 7.1% over the past twelve months,. The median house price increased in all capital cities except Darwin.

Detailed data on median prices for houses and other dwellings is available in the REIA Real Estate Market Facts publication, which will be released on March 15, 2017.

Chart 3a First home buyers share of dwellings financed

Chart 4 Median house price and family income

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Chart 3b Average home loans for first and change-over buyers

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Chart 5 Quarterly interest ratesMedian family income and average monthly loan repayments

The national median weekly family income increased to $1,681, an increase of 0.5% during the December quarter and an increase of 2.2% compared to the same quarter 2015.

During the December quarter 2016, the average monthly loan repayment increased to $2,217, an increase of 3.7% over the quarter and a decline of 3.8% compared to the corresponding quarter 2015.

The proportion of family income required to meet loan repayments increased marginally to 30.4% during the December quarter 2016 from 29.5% in the previous quarter.

Average loan (all borrowers)

The total number of loans (excluding refinancing) increased to 112,781, an increase of 7.1% over the quarter but a decrease of 2.3% compared to the same quarter last year.

The average loan size increased to $389,254, an increase of 3.7% over the December quarter but a decline of 0.6% since the December quarter 2015.

Interest rates

During the December quarter, the Reserve Bank of Australia (RBA) left the official cash rate at 1.5%. The gap between variable and three-year fixed rates was 0.6 percentage points. The December quarterly average variable standard interest rate remained steady at 4.7% compared with the previous quarter and decreased by 0.3 percentage points when compared to the corresponding quarter 2015. The quarterly average three-year fixed rate increased by 0.1 percentage points, to 4.1% during the quarter. This was a reduction of 0.3 percentage points when compared to the December quarter 2015.

Average quarterly variable interest rates were:

Banks – 4.8%, the same as the previous quarter.

Permanent Building Societies – 4.4%, the same as the previous quarter.

Other lenders – 3.7%, a decrease of 0.1 percentage point over the quarter.

The average fixed (3 year) interest rates were:

Banks – 4.1%, a 0.1 percentage point increase over the December quarter.

Permanent Building Societies – 4.1%, a 0.1 percentage point increase over the December quarter.

Other lenders – 4.0%, a 0.1 percentage point increase over the December quarter.

Chart 5 shows the movement of the RBA cash rate, the quarterly average standard variable rate and the quarterly average three-year fixed rate over the last five years.

The home loan affordability indicator

The Home Loan Affordability Indicator (HLAI) is the ratio of median family income to average loan repayments. An increasing value reflects improving affordability of housing loans.

Table 3 shows the HLAI for Australia and each state and territory for the September quarter 2016 and is compared with the preceding quarter and the corresponding quarter 2015. Percentage changes are shown in Table 4.

A long-term series of the quarterly movements in the HLAI is shown in Chart 6.

Table 3: Home loan affordability indicator

Dec qtr 2016 Sep qtr 2016 Dec qtr 2015NSW 27.1 28.2 25.4

VIC 31.4 32.4 28.9

QLD 37.3 37.6 36.3

SA 39.3 39.7 36.9

WA 43.0 43.9 41.6

TAS 43.1 43.9 42.3

NT 46.2 51.1 47.1

ACT 50.8 52.2 50.3

AUS 32.9 33.9 30.9

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Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Variable rate 3yr fixed rate RBA cash rate

6

Table 4: Percentage change in HLAIQuarterly change Annual change

NSW -4.0% 11.0%

VIC -3.0% 12.0%

QLD -1.0% 3.8%

SA -1.1% 7.8%

WA -2.0% 5.5%

TAS -1.7% 3.9%

NT -9.6% 8.6%

ACT -2.7% 3.8%

AUS -3.1% 9.7%

A long-term series of the quarterly movements in the Australian CPI and the weighed average median three bedroom house rent for the eight Australian capital cities are shown in Chart 7.

Chart 7 Australian rent and CPI

Table 5: AustraliaDec 2016 Sep 2016 Sep 2015

Home Loan Affordability Indicator (HLAI) 32.9 33.9 30.9

Average HLAI since December quarter 1996 33.3 33.3 33.3

Proportion of family income devoted to meeting average loan repayments

30.4% 29.5% 32.4%

Proportion of family income devoted to meeting median rents

24.4% 24.2% 24.6%

Median weekly family income $1,681 $1,673 $1,644

Average monthly loan repayment $2,217 $2,138 $2,305

Average loan $389,254 $375,324 $391,624

Total number of loans (excl refinancing) 112,781 104,956 115,040

Number of loans to first home buyers 23,273 21,825 23,157

Average first home buyer loan $323,633 $319,633 $328,467

Banks

Average loan $392,765 $378,386 $401,580

Standard variable interest rate 4.8% 4.8% 5.6%

Fixed interest rate 4.1% 4.0% 4.9%

Building societies

Average loan n/a n/a $271,361



Other lenders

Average loan n/a n/a $298,316



Percentage change HLAI CPI

Since previous quarter -3.1% 0.5%

Since corresponding quarter last year 6.3% 1.5%

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Weighted Median Rent ($) ConsumerPrice Index (CPI)

Chart 6 Home loan affordability indicator over time


7

New South Wales saw a slight decline in housing affordability over the quarter. The proportion of income required to meet loan repayments increased to 37.0%, an increase of 1.5 percentage points over the quarter and a decrease of 2.5 percentage points compared with the corresponding quarter 2015. With the proportion of income required to meet loan repayments 6.5 percentage points higher than the nation’s average, New South Wales remained the least affordable state or territory in which to buy a home.

New South Wales recorded a decline in rental affordability with the proportion of income required to meet median rent payments increasing to 28.6%, an increase of 0.5 percentage points over the December quarter and an increase of 0.6 percentage points compared to the same quarter last year.

Of the total number of first home buyers that purchased during the December quarter, 18.4% were from New South Wales. The number of loans to first home buyers increased to 4,276, an increase of 7.8% over the quarter and a decrease of 5.0% compared to the December quarter 2015. First home buyers make up only 8.2% of the State’s owner-occupier market – the lowest level across the nation. The average loan to first home buyers increased to $381,333, an increase of 4.4% over the quarter and an increase of 0.2% compared to the same quarter last year.

The number of loans (excluding refinancing) in New South Wales increased to 32,456, an increase of 8.9% over the quarter and a decrease of 4.1% compared to the December quarter 2015. The average loan size increased to $472,380, an increase of 4.6% over the quarter but a decrease of 0.9% compared to the December quarter 2015. New South Wales has the largest average loan size across the country.

State by stateNew South Wales

Chart 8 Home loan affordability indicator Sydney

Chart 9 Median rents Sydney

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Fast factMonthly loan repayments increased over the quarter for NSW.

Table 6: New South WalesDec 2016 Sep 2016 Dec 2015



Proportion of family income devoted to meeting average loan repayments 37.0% 35.5% 39.4%

Proportion of family income devoted to meeting median rents 28.6% 28.1% 27.9%



Average loan $472,380 $451,397 $476,812




Banks

Average loan $395,547 $380,819 $407,669

Building Societies

Average loan n/a n/a n/a

Other Lenders


Percentage Change HLAI CPI



8

Victoria Table 7: VictoriaDec 2016 Sep 2016 Dec 2015







Average loan $394,677 $380,569 $402,987




Banks

Average loan $395,547 $380,819 $407,669

Building Societies


Other Lenders





fast factsBoth housing affordability and rental affordability declined in Victoria over the past quarter.

Chart 11 Median rents Melbourne

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Chart 10 Home loan affordability indicator Melbourne

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Over the December quarter, Victoria showed a decline in housing affordability, with the proportion of income required to meet loan repayments increasing to 31.8%, an increase of 0.9 percentage points over the quarter but a decrease of 2.8 percentage points compared to the same quarter of the previous year.

Rental affordability in Victoria has also declined over the quarter with the proportion of income required to meet median rents increasing to 23.3%, an increase of 0.4 percentage points over the quarter but a decrease of 0.2 percentage points compared to the December quarter 2015.

The number of loans to first home buyers in Victoria increased to 7,079, an increase of 7.1% over the quarter and an increase of 1.2% compared to the December quarter 2015. Of the total number of first home buyers that purchased during the December quarter, 30.4% were from Victoria while first home buyers make up 15.2% of the State’s owner-occupier market. In the December quarter 2016, the average loan to first home buyers was $325,200, an increase of 1.5% over the quarter and nearly the same level as at the same time last year.

In Victoria, the total number of loans (excluding refinancing) was 30,712, an increase of 10.0% during the quarter but a decrease of 2.5% compared to the December quarter 2015. The average loan size was $394,677 over the quarter, an increase of 3.7%, but a decrease of 2.1% when compared to the corresponding quarter 2015.


9

Housing affordability in Queensland declined slightly over the December quarter with the proportion of income required to meet home loan repayments increasing to 26.8%, an increase of 0.2 percentage points over the quarter but a decrease of 0.8 percentage points compared to the same time last year.

Rental affordability in Queensland improved over the quarter with the proportion of the median family income required to meet the median rent decreasing to 23.2%, a decrease of 0.2 percentage points over the quarter and a decrease of 0.5 percentage points compared to the same quarter 2015.

Over the December quarter, the number of loans to first home buyers in Queensland increased to 5,803, an increase of 9.7% over the quarter and an increase of 12.6% compared to the same quarter of 2015. Of all Australian first home buyers over the quarter, 24.9% were from Queensland while the proportion of first home buyers of the State’s owner-occupier market was 17.4%. The average loan size to first home buyers decreased to $301,633, a decrease of 0.8% during the quarter but an increase of 0.1% compared to the December quarter 2015.

The number of loans (excluding refinancing) increased in Queensland to 24,206, an increase of 4.2% over the quarter and an increase of 3.4% compared to the December quarter of the previous year. The average loan size increased to $334,118, an increase of 1.7% during the quarter and 2.3% compared to the December quarter 2015.

Queensland Table 8: QueenslandDec 2016 Sep 2016 Dec 2015







Average loan $334,118 $328,616 $326,516




Banks

Average loan $334,927 $329,231 $407,669

Building Societies


Other Lenders





Chart 12 Home loan affordability indicator BrisbaneChart 13 Median rents Brisbane

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fast factThe number of new home loans in Queensland increased by 4.2% over the quarter.

10

South Australia recorded a decline in housing affordability with the proportion of income required to meet monthly loan repayments increasing to 25.5%, an increase of 0.3 percentage points over the quarter but a decrease 1.6 percentage points compared to the December quarter 2015.

Rental affordability in South Australia improved over the quarter with the proportion of income required to meet rent payments decreasing to 22.2%, a decrease of 0.2 percentage points both over the quarter and compared to the December quarter 2015.

Over the December quarter, the number of loans to first home buyers in South Australia increased to 1,263, an increase of 2.7% over the quarter and a decrease of 0.5% compared to the December quarter 2015. Of all Australian first home buyers over the quarter, 5.4% were from South Australia while the proportion of first home buyers in the state’s owner-occupier market was 10.9%. The average loan size to first home buyers was $262,667, a decrease of 0.6% over the quarter and a decrease of 0.7% when compared to a year earlier.

In South Australia, the total number of loans (excluding refinancing) increased to 7,575, an increase of 4.4% over the quarter and a decrease of 0.5% compared to the December quarter 2015. The average loan size increased to $297,358, an increase of 2.1% over the quarter and an increase of 0.8% compared to the same time last year. The State has the second lowest average loan size across the country.

South Australia Table 9: South AustraliaDec 2016 Sep 2016 Dec 2015







Average loan $297,358 $291,317 $294,888




Banks

Average loan $306,020 $299,555 $295,406

Building Societies


Other Lenders





Chart 14:Home loan affordability indicator Adelaide

fast factsSouth Australia has the second lowest average loan size across the country.

Chart 15 Median rents Adelaide

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Western Australia saw a decline in housing affordability over the quarter with the proportion of income required to meet loan repayments increasing to 23.3%, an increase of 0.5 percentage points over the quarter but a decrease of 0.7 percentage points compared to the December quarter 2015.

Rental affordability in Western Australia remained steady during the December quarter with the proportion of family income required to meet the median rent remaining at 19.2%, with no change in percentage points over the quarter and a decrease of 1.4 percentage points compared to the year before.

The number of first home buyers in Western Australia increased to 3,809 in the December quarter, an increase of 1.3% over the quarter but a decrease of 11.3% compared to the same time last year. Of all Australian first home buyers over the quarter, 16.4% were from Western Australia while the proportion of first home buyers in the state’s owner-occupier market was 21.0%. The average loan to first home buyers increased to $321,000, an increase of 0.3% over the quarter but a decrease of 4.8% compared to the December quarter 2015.

The total number of loans (excluding refinancing) in Western Australia increased to 12,074, an increase of 1.0% over the quarter and a decrease of 9.8% compared to the same time last year. The average loan size increased to $351,117, an increase of 2.2% over the quarter and an increase of 0.4% compared to the December quarter 2015.

Western Australia Table 10: Western AustraliaDec 2016 Sep 2016 Dec 2015







Average loan $351,117 $343,490 $349,867




Banks

Average loan $351,250 $343,457 $350,954

Building Societies


Other Lenders





Chart 16 Home loan affordability indicator Perth

Chart 17 Median rents Perth

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Fast factAt 26.6% Western Australia has the highest proportion of first home buyers.

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Housing affordability in Tasmania declined with the proportion of income required to meet home loan repayments increasing to 23.2%, an increase of 0.4 percentage points over the December quarter but a decrease of 0.5 percentage points from the December quarter 2015.

Rental affordability in Tasmania also declined with the proportion of income required to meet median rents increasing to 25.3%, an increase of 1.3 percentage points over the December quarter but an increase of 0.7 percentage from the same quarter 2015.

The number of first home buyers in Tasmania increased to 425, an increase of 6.5% over the December quarter and an increase of 14.2% compared to the same quarter of the previous year. Of all Australian first home buyers over the quarter, 1.8% were from Tasmania while the proportion of first home buyers in the state’s owner-occupier market was 13.4%. The average loan to first home buyers decreased to $227,500, a decrease of 6.8% over the quarter and a decrease of 3.3% compared to the same quarter 2015.

The total number of new loans (excluding refinancing) in Tasmania increased to 2,363, an increase of 8.4% over the December quarter, and an increase of 11.3% compared to the corresponding quarter 2015. The average loan size increased to $243,614, an increase of 2.4% over the quarter and an increase of 4.1% compared to the same time last year.

Tasmania Table 11: TasmaniaDec 2016 Sep 2016 Dec 2015







Average loan $243,614 $237,957 $234,088


Number of loans to first home buyers 425 399 372


Banks

Average loan $246,040 $240,323 $240,811

Building Societies


Other Lenders





Chart 18 Home loan affordability indicator HobartChart 19 Median rents Hobart

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$250

$300

$350

$400

$450

$500

$550

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ren

t per

wee

k

Australian (wt) Houses Other dwellings 0

10

20

30

40

50


HLI

A


Fast factTasmania recorded the greatest decrease in rental affordability.


13

Housing affordability in the Northern Territory declined with the proportion of income required to meet loan repayments increasing to 21.6% in the December quarter, an increase of 2.0 percentage points over the quarter and an increase of 0.4 percentage points when compared to the December quarter 2015.

Rental affordability in the Northern Territory improved slightly with the proportion of income required to meet the median rent decreasing to 24.5%, a decrease of 0.2 percentage points over the quarter and a decrease of 2.3 percentage points compared to the December quarter 2015.

The number of loans to first home buyers in the Northern Territory increased to 152, an increase of 4.8% over the December quarter and an increase of 29.9% compared to the December quarter 2015. Of all Australian first home buyers over the quarter, 0.7% were from the Northern Territory while the proportion of first home buyers in the Territory’s owner-occupier market was 16.4%. The average loan size to first home buyers increased to $327,367, an increase of 12.2% over the quarter and an increase of 3.1% compared to the same time last year.

The number of new loans (excluding refinancing) in The Northern Territory increased to 690, an increase of 5.7% over the quarter but a decrease of 14.0% compared to the December quarter 2015. The average loan size increased to $342,190, an increase of 11.2% over the quarter and an increase of 9.1% compared to the December quarter 2015.

Northern Territory Table 12: Northern TerritoryDec 2016 Sep 2016 Dec 2015







Average loan $342,190 $307,631 $313,582

Total number of loans (excl refinancing) 690 653 802



Banks

Average loan $359,884 $323,246 $348,421

Building Societies


Other Lenders



Since previous quarter -9.6% -0.1%

Since corresponding quarter last year -1.8% -0.4%

Chart 20 Home loan affordability indicator Darwin Chart 21 Median rents Darwin

$150

$250

$350

$450

$550

$650

$750

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ren

t per

wee

k


0

10

20

30

40

50


HLI

A


Fast factRental affordability improved for Northern Territory.

14

Housing affordability in the Australian Capital Territory declined with the proportion of income required to meet home loan repayments increasing to 19.7%, an increase of 0.6 percentage points over the quarter but a decrease of 0.2 percentage points compared to the same quarter last year.

Rental affordability also declined with the proportion of income required to meet the median rent increasing to 17.6%, an increase of 0.3 percentage points over the quarter and an increase of 0.8 percentage points compared to the December quarter 2015.

The number of loans to first home buyers in the Australian Capital Territory increased to 466, an increase of 12.0% over the quarter but a decrease of 3.7% compared to the December quarter 2015. Of all Australian first home buyers over the quarter, 2.0% were from the Australian Capital Territory while the proportion of first home buyers in the Territory’s owner-occupier market was 14.5%. The average loan for first home buyers decreased to $319,133, a decrease of 1.4% over the quarter and a decrease of 4.1% compared to the corresponding quarter 2015.

The number of loans (excluding refinancing) in the Australian Capital Territory increased to 2,322, an increase of 18.6% over the quarter and a decrease of 1.1% compared to the December quarter 2015. The average loan size increased to $390,668, an increase of 3.2% over the quarter and an increase of 2.5% compared to the corresponding quarter 2015.

Australian Capital Territory Table 13: Australian Capital Territory

Dec 2016 Sep 2016 Dec 2015







Average loan $390,668 $378,579 $380,972




Banks

Average loan $391,668 $379,343 $381,044

Building Societies


Other Lenders





Chart 22 Home loan affordability indicator Canberra Chart 23 Median rents Canberra

$150

$200

$250

$300

$350

$400

$450

$500

$550

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Ren

t per

wee

k


0

10

20

30

40

50

60

Sep-12 Sep-13 Sep-14 Sep-15 Sep-16

HLI

A


fast factACT recorded the lowest increase in home loan affordability of the year.


15


Adelaide Bank/REIA Housing Affordability Report is based on data from all major lending institutions. It is a comprehensive and accurate assessment of the ability of Australians to meet the cost of home purchase. Any differences between information contained in this report and previous editions of the Adelaide Bank/REIA Housing Affordability Report are due to revisions in the database that may be necessary from time to time.

Home Loan Affordability Indicator: A ratio of family income to average loan payments. (An increase denotes easier affordability). The HLAI divided by a (constant) factor of 10 is the number of times by which median family income exceeds average home loan repayments in a full year. The reciprocal value of the HLAI is the proportion of family income that is required to repay the average home loan in a full year.

Loans: Average size and total number for first home buyers and all borrowers (excluding refinancing) are average data over the quarter, based on all lender data from the ABS.

Average Monthly Loan Repayment: Loan repayment figures are calculated from data provided by the ABS, Cannex Pollfax, and financial institutions across Australia. From the June quarter 2012, interest rates are calculated as weighted average interest rates for banks, building societies and other lenders.

Median Weekly Family Income: A family is defined as a married couple with or without dependent children. The major part of family income is adult wages and salaries. Income data are sourced from ABS records, and updated on the basis of movements in average weekly earnings.

Quarterly Median House Prices/ Quarterly Median Vacancy Rates: House price and vacancy data are taken from REIA Real Estate Market Facts publication.

Proportion of Family Income to Meet Rent Payments: The percentage of Median Weekly Family Income required to meet the median rent for a three bedroom house. Rents are obtained from REIA Real Estate Market Facts publication.

Real Estate Institute of AustraliaThe Real Estate Institute of Australia is a federation of state and territory Real Estate Institutes. Formed in 1924, it represents the real estate industry in Australia at national and international levels.

Real Estate House 16 Thesiger Court, Deakin, ACT PO Box 234, Deakin West, ACT 2600 Phone: (02) 6282 4277 Fax: (02) 6285 2444 Website: www.reia.com.au Email: [email protected]

Adelaide BankAdelaide Bank is a leading customer connected business, operating for more than 100 years. Adelaide Bank was established in January 1994, originating from the Co-operative Building Society of South Australia, which was Australia’s largest building society at that time.

Adelaide Bank is now the dedicated intermediary lending business of Bendigo and Adelaide Bank Limited. We have a specialised focus on supporting intermediaries through continued product innovation and exceptional service levels.

Adelaide Bank’s success is achieved by distributing mortgage products through partnerships with industry professionals. This offers our customers the freedom of choice when sourcing products that best meet their financial needs.

Adelaide Bank Helpline within Australia: 1300 652 220 overseas: +61 8 8300 6000 www.adelaidebank.com.au

All rights reserved. No part of this publication may be reproduced,stored in a retrieval system, or transmitted in any form or by means of electronic, mechanical, photocopy, recording or otherwise, without the prior consent of the publishers.

© 2016 REAL ESTATE INSTITUTE OF AUSTRALIA ISSN: 1447 6606 Registered by Australia Post. Publication No. PP 299436/00045

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