First home-buyers dominate for the first time in 10 years: REIA

Australia has recorded a ten-year high for first homes buyers in the last quarter, according to the latest REIA’s “The Housing Affordability Report”.

The most recent ‘Housing Affordability Report (HAR)’ revealed a 10-year high for first home ownership and an overall improvement in housing affordability across Australia.

REIA President, Adrian Kelly, said a combination of factors meant that housing affordability has faced a bright spot for those who entered the market during the September 2020 quarter.

“Market entry has experienced its largest year-on-year increase since 2009 and largest quarterly increase since 2010,” Mr Kelly said.

“With a September quarter increase of 36.1 per cent, first home buyers now make up 40.8 per cent of the owner-occupied dwelling market.

“This is particularly good news given the large challenges faced by tenants at the outset of the COVID-19 pandemic.

“The average loan size to first home buyers decreased to $406,223 – a decrease of 5.4 per cent over the quarter, but an increase of 0.8 per cent over the past 12 months.”

Mr Kelly said that first home buyers are responding to the stable market and historically low-interest rates.

“Banks could do more to further improve affordability by passing on in-full interest cuts and help even more Australian’s buy homes,” he noted.

“HAR shows us that Australian families experienced a small income increase of 0.5 per cent while the average loan repayment decreased by 2.5 per cent.”

“For home owners, affordability improved with income-to-loan repayments decreasing 1.1 percentage points to 33.9 per cent over the quarter.

“For renters, affordability declined in the September quarter and over the past year, with the proportion of income required to meet rent payments increasing by 0.4 percentage points to 23.7 per cent. This is mainly attributed to the increase in rents in a number of capital cities.”

The next HAR will be released on March 3, 2021 showing the full impact of CV-19 on housing affordability for 2020.

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Samantha McLean

Samantha McLean is the Co-Founder and Managing Editor of Elite Agent and Host of the Elevate Podcast.


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