Housing loan numbers begin to fall for first home buyers

(source: REIA Housing Affordability Report, September Quarter 2009)

Although there were no significant changes in housing affordability in the September quarter, the total number of loans began to decrease, particularly in the first home buyer market.

The number of loans to the first home buyers decreased by 11.7% to 48,507 loans. Despite this decrease in the September quarter, over the year, loans for first home buyers nationally increased by 72.8% and the total number of loans increased by 41.3%.

The Australian Capital Territory remained the most affordable state or territory in which to buy a home, where the proportion of income required to meet loan repayments increased slightly to 17.2%.  This is 11.8 percentage points below the national average. New South Wales remained the least affordable state or territory in which to buy a home, where the proportion of income required to meet loan repayments increased to 31.2%; 2.3 percentage points above the national average.

For the September quarter, Tasmania and Queensland showed the biggest improvement in housing affordability, with the proportion of income required to meet loan repayments decreasing by 1.3 percentage points. Housing affordability in Victoria declined the most, with the proportion of income required to meet loan repayments increasing by 0.9 percentage points for the September quarter.

Australian House Prices Rise Strongly

Melbourne and Sydney housing markets recover

According to the latest RP Data-Rismark National Dedonic Index, Australian home values rose by an indicative 1.4 per cent in October after a sluggish 0.4 per cent growth in September.

Over the first 10 months in 2009, house prices have now risen by 10 percent. According to RP Data’s Senior Research Analyst, “the strong growth figures throughout October after a slowdown during September show that the market is very resilient and that the 25 basis point interest rate increase during the month has not immediately impacted the market.”

The biggest story of 2009 has been a strong recovery of Sydney and Melbourne housing markets with Melbourne leading the way by delivering capital gains of +14.9 percent while Sydney had a cumulative growth of 9.9 percent. Other cities that have performed strongly this year besides Melbourne and Sydney are Darwin (+12.7 per cent), Canberra (+11.0 per cent), Brisbane (+6.9 per cent), Perth (+6.1 per cent) and Adelaide (+4.6 per cent).