Canberran first time buyers left in the lurch, despite highest affordability level

Canberran first time buyers left in the lurch, despite highest affordability level
Jennifer DukeSeptember 2, 2014

Canberra continues to rank as the most affordable state in Australia, however first home buyers shouldn’t get their hopes up.

The Adelaide Bank/REIA Housing Affordability Report notes that while it looks good on paper, the reality may be a different story.

For the ninth year in a row, Canberra records the highest affordability level based on a median house price of $535,000 put into the ratio of median family income to average loan repayments. This sees the proportion for the ACT stand at 19.8%, compared to New South Wales with the worst result at 35.3%.

REIA president Peter Bushby said that the report showed a positive for Victoria, Queensland, South Australia and Tasmania home buyers, with affordability improvements over the last quarter. The ACT recorded the strongest annual improvement, despite remaining unchanged over the quarter.

However, Bushby said that first home buyers might not be consider it to be the case in the ACT.

“While on paper, Canberrans have access to the most affordable homes, I suspect many people don’t feel that this is the case, especially first home buyers,” he said.

“While the ACT recorded a 9.7% increase in the number of loans to first home buyers this quarter, this figure is down 34.4% when compared to this time last year,” Bushby explained.

With the First Home Owner Grant for established homes ending a year ago, this was unsurprising, he explained, noting that most states now have restrictions on the established market that he considers “disappointing”.

Canberra’s high median family income sat at $2,491 for the June quarter, with New South Wales recording a median family income at $1,562, where their median house price is $811,837. It seems the high earners in the ACT may be what is behind the territory’s achievement of the “most affordable” title.

Jennifer Duke

Jennifer Duke was a property writer at Property Observer

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