Owning property easier now than 10 years ago

Owning property easier now than 10 years ago

Posted on Wednesday, September 04 2013 at 10:51 AM

It’s getting easier for investors and homeowners to buy and hold property, with housing affordability improving over the past two years thanks to falling interest rates.

The proportion of income required to cover mortgage
repayments is now down to 28.7 per cent, which is the lowest it has been in a
decade, according to the Adelaide Bank-Real Estate Institute of Australia
(REIA) Housing
Affordability Report

All states and territories recorded improvements over the
past quarter, REIA president Peter Bushby says, with the exception of the
Northern Territory.

Queensland property in particular is very affordable right
now, Bushby says. The proportion of income needed to meet loan repayments
dropped by 1.9 per cent to 26 per cent.

“No doubt, the seven interest rate cuts since November 2011
have played a role,” he says.

“The variable interest rate fell in the June quarter, from
6.1 per cent to 5.9 per cent, which is a decrease of 0.7 per cent compared to
the same time last year. The (average) three year fixed rate fell by 0.3 per
cent over the quarter. It’s 0.9 per cent on the same period in 2012, sitting at
5.1 per cent.”

He adds the Australian Capital Territory is still the most
affordable state or territory due largely to higher incomes there.

New South Wales remains the least affordable state, with the
proportion of income required to meet loan repayments 5.6 percentage points
higher than the nation’s average.

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