Western Australia cements position as first home buyer hotspot: REIWA

The latest Adelaide Bank/REIA Housing Affordability Report for the September quarter has revealed that, unsurprisingly, New South Wales remains the least affordable place to buy.

Based on the loan repayments to percentage of income, it's unsurprising that the ACT manages to score the "most affordable" title on the list - as it has previously.

Adelaide Bank general manager Damian Percy said that the ACT is down 0.4% on its previous quarter.

However, it’s Western Australia that’s attracting attention.

“When compared to the June quarter, Western Australia stands out in two key measures, firstly the greatest improvement in terms of the proportion of income required to meet loan repayments, which fell 0.7 percentage points to 25.9% and as the state with the largest proportion of first home buyers who now comprise 20.7% of the Western Australian owner-occupied market,” he said.

The percentage figure noted below is the percentage if income to loan repayments:

• ACT - 19.4%
  
  
• TAS - 24.4%

Average first home buyer (FHB) home loan decreased by 5.2%. The loan is now at $213,233.

• WA - 25.9%

First home buyers totalled 20.7% of WA’s owner occupier market over the quarter, the highest proportion in Australia, and totalled 25.1% of all Australian FHB purchases recorded.

• SA - 26.8%

The largest quarterly drop of FHBs was seen in South Australia, perhaps as a result of the end of the grant for established purchases.

• NT - 27.2%

Largest increase in loans over this quarter and past year noted.

• QLD - 28.1%

While improvements were seen in all the other states – this is an unchanged result for Queensland.

• VIC - 31.9%

Victoria accounted for 26.4% of first home buyers across the country in the September quarter.

• NSW - 34.5%

In New South Wales the average loan size to first home buyers is up 9.1% compared to the same quarter in 2013. The loan is now at $327,767.

Source: Figures - Adelaide Bank, Commentary - REIWA

The Australian average figure sits at 30.4%, an overall improvement – down 0.5% over the quarter.

The president of the Real Estate Institute of Western Australia David Airey said that the Western Australia situation is a good picture for those looking to avoid housing stress.

He also noted that first home buyers currently have a stamp duty exemption for buying under $430,000.

“This means that home buyers in WA can avoid ‘housing stress’ by remaining under the 30 per cent threshold regarded by economists as the safest benchmark for comfortable living with a balance between income and housing expenditure,” Airey said.

“The moderating house price growth in WA has translated into good news for those wanting to enter the housing market, with 20.7% of WA’s owner-occupied market now made up with first home buyers.”

However, the figure of loans to first home buyers are still low – down over the September quarter compared to a year prior by 8.3%.

Office of State Revenue figures for Western Australia note a jump from 1,535 first home grant payments in September to 1,826 in October.

First home buyers’ median purchase price was $450,000 for metropolitan Perth and $355,000 in the regions.

“This has dropped from a metropolitan peak of $470,700 in June and from a regional peak of $365,000 reached in August,” Airey said.