Crisis point hit for Aussie housing
Australian mortgage holders are now spending 45.5 per cent of their income on loan repayments – and first home buyer activity is bearing the burden.
First home buyer activity declined by -5.4 per cent over the September quarter 2023, and loan sizes increased and mortgage serviceability became increasingly tight.
Leanne Pilkington, president of the Real Estate Institute of Australia (REIA) stated: “Over the September quarter, the number of first home buyers decreased in all states and territories.”
The rate of decline ranged from -0.4 per cent in Victoria to a massive -17.2 per cent in the ACT.
“First home buyers now make up 36 per cent of owner-occupier dwelling commitments, a decrease of 0.5 percentage points over the quarter,” said Pilkington.
The average first home buyer in Australia now takes out a loan of $503,082, while the average loan size for all buyers is now $592,140.
“Over the quarter, the average loan size increased in all states and territories except Victoria and the Northern Territory,” Pilkington explained.
“Increases ranged from 0.7 per cent in Western Australia to 3 per cent in South Australia. Over the past 12 months, the average loan size increased in Queensland, South Australia, Western Australia and the Australian Capital Territory, but decreased in New South Wales, Victoria, Tasmania and the Northern Territory.”
As housing affordability continues to worsen across the country, Australians are becoming more reluctant to buy property.
According to the REIA, the number of owner-occupied dwelling loans decreased to 74,855 in the September quarter, marking a quarterly decrease of -4.1 per cent and an annual decrease of -12.1 per cent.
In the ACT, the quarterly decrease was as much as -15.4 per cent in just three months.
First home buyers in particular decreased to 26,928 over the September quarter, a -5.4 per cent quarterly decline.
“Nationally, the outlook for Australians serving a home loan continued to be challenging with the cash rate now at 4.35 per cent,” stated Pilkington.
She noted that rental affordability also experienced a hit over the September quarter 2023.
“Rental affordability declined with the proportion of income required to meet median rent increasing by 0.5 percentage points to 23.6 per cent,” shared Pilkington.
“Rental affordability declined in New South Wales, Victoria, Queensland and South Australia, but improved in Western Australia, Tasmania, the Northern Territory and the Australian Capital Territory.”
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