Housing affordability in Australia has reached its highest level since 1999, but market conditions still do not appear to be in favor of first-time homebuyers, according to the latest Housing study Industry Association (HIA).
HIA's accessibility index showed the highest level of accessibility since 1999, with all capitals reporting improvement in the June quarter. The index measures affordability by taking into account the latest house prices, mortgage interest rates and wage trends.
It now takes less than 1.2 times the average income to service a mortgage on median-priced housing in capital cities, said Tim Reardon, chief economist at HIA.
"The combination of lower interest rates, sluggish house price growth, and relatively steady wage growth over the past three years has resulted in this improving performance. # 39; affordability, "he said.
This improvement, however, does not translate into easier market conditions for many first-time homebuyers.
Reardon said the biggest hurdle potential buyers face is no longer the cost of paying a mortgage. He said the surge in newly built homes over the past five years has held back the growth in house prices, making housing more affordable.
Despite favorable terms, however, first-time homebuyers are unable to break into the market due to paperwork, making it difficult to get a loan. mortgage.
"A decade of paperwork has made it considerably more difficult for first-time homebuyers to secure a mortgage for their first home purchase," Reardon said. "The additional bureaucracy imposed in recent years means that banks are increasingly lending to these. Who already own a house."
Reardon said reforms since the global financial crisis have forced first-time homebuyers out of the market, contributing to a decline in homeownership. He said the collapse of financial institutions during GFC forced Australia to review the regulatory landscape for the banking sector.
"Since that time, the Treasury and other regulators have been working to reduce the risk of residential mortgage activity within banks for fear that they will be forced into debt again. assume the risk of the banks, ”he said.
Reardon believes that while banks claim to be 'open for business' they have narrowed the criteria for a potential borrower to be considered 'high quality', making it more difficult for many obtain financing for housing than this was prior to 2014.
"The problem is that in the pursuit of this 'unmistakably strong' financial system, tighter regulation has forced the banking industry to eliminate much of the flexibility in the mortgage market that made entry into the mortgage market. property accessible to households of varying credit quality ". Reardon said. "Ensuring that home ownership remains an achievable aspiration for Australian households is an equally important goal."
Top suburbs:
Belmont
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tiwi
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Alexandria
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Murdoch
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lockridge
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