Rental Market Best Affordability in 11 Years
According to a study by the Real Estate Institute of Australia (REIA), rental affordability around Australia has hit an 11-year high. The study found that the proportion of a household's income required to pay rent decreased to 23.8 per cent for the second quarter of 2019. This is a drop of 1.2 percentage points for the quarter and 0.3 percentage points for the year. In contrast, housing affordability declined in the second quarter due to increasing loan amounts.
These rental affordability statistics are good news for property investors as people are still looking to renting instead of buying as housing affordability remains a challenge for many Australians. According to the REIA's study, loan amounts for the June quarter increased by between 0.2 per cent and 6.2 per cent across all states and territories. Further, the number of loans written increased by 6.6%. This is likely on the back of the RBA's recent rate cuts and the fact that these cuts have been passed down by Australia's banks.
First home buyers have driven some of this year's loan activity, with first home buyer loans to owner-occupiers increasing five out of the six months to 30 June 2019. Compared to the last 12 months, however, there were 16,521 fewer home loans written which equates to a drop of 15.1 per cent.
Looking across each state and territory, New South Wales remains the most expensive place to buy a home. According to the REIA's study, the proportion of income needed to make loan repayments is 6 percentage points above other states and territories around Australia. The proportion of family income required to meet loan repayments in each state and territory is as follows:
• Victoria - 32.5 per cent
• Queensland - 28.2 per cent
• South Australia - 27.1 per cent
• Western Australia - 22.4 per cent
• Tasmania - 25.8 per cent
• Northern Territory - 20.6 per cent
• Australian Capital Territory - 20.6 per cent
Lending activity appears to have picked up slightly in recent months. This is likely to have been driven by the RBA's recent rate cuts and declining property prices. With the Government and the RBA still at odds about how to stimulate Australia's economy, uncertainty remains about whether the property market is about to experience another uptick in prices.
For further information about real estate deals in this area, contact No Bull Real Estate, your most reliable and friendly real estate agents in Newcastle. Buying, selling, leasing for residential, commercial, industrial property, contact your local expert to buy, sell or lease today on 49552624 or www.nobullrealestate.com.au