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More Pressure on First Home Buyers

Posted: March 28th, 2014 | Author: | Filed under: Australian Home Prices | Tags: , , , , , , | Comments Off on More Pressure on First Home Buyers

More Pressure on First Home BuyersLatest figures from the Housing Industry Association – HIA –  suggest it will become even harder for first-time buyers to enter the housing market, according to the report affordability has waned, and 2014 is likely to see further gains in residential property prices, locking out more first timers.

The HIA’s Affordability Index eased by 0.5 per cent in the December quarter, as the impact of previous interest rate cuts declined. Hobart reported the biggest fall of the capital cities, with a 9.2 percent drop. That was followed by Sydney, down 4.4 percent, Perth, 2.5 percent, the ACT 1.2 percent and Brisbane 1 percent.

However affordability in both Melbourne and Adelaide rose by 5.5 percent during the quarter, the HIA report suggests that addressing the supply of affordable housing is one of the most prominent policy challenges facing all levels of government. In a separate report, population growth has also put pressure on housing affordability ::::

More Pressure on First Home Buyers

Chief economist, Harley Dale says affordability in the property market is likely to deteriorate further, as interest rates stay on hold and household earnings growth remains subdued.

“The key to the affordability improvement for home owners in recent years has very clearly been that reduction in interest rates,” Dr Dale said. “So now that we look as though we’re not going to get any further reductions, that cyclical improvement in affordability has effectively run its course.”

Dr Dale is calling for changes to state and federal government policies to boost housing supply and affordability.

Strong Population Growth Puts More Pressure on Housing Market

In a separate report, the HIA implied that continued strong growth in population was increasing pressure on housing demand.

The Australian Bureau of Statistics – ABS – report, released yesterday suggests that Australia’s population grew by more than 100,000 people in the 3 months to September 2013, reaching 23.24 million. The nations net overseas migration increased 1 percent – or 241,018 new migrants – for the year to September 2013. The natural increase in population (births) added 164, 428 people in the same period.

“The result provides annual growth of a relatively strong 1.8 percent” HIA economist Geordan Murray said. “We have a situation where the importance of migration in securing the nation’s future economical prosperity is widely acknowledged.”

The migration element of population growth contributed 1.1 percent to the overall annual growth of Australia’s population.

“It is vital that the implications of stronger population growth for housing demand are reflected in a clear, strategic focus on housing supply policy from all levels of government,” Mr Murray said.


RELATED! Demand Slips for Aussie Home Loans as Buyers Exit the Market

Demand Slips for Aussie Home Loans as Buyers Exit the MarketDemand for new home loans by owner-occupiers has slipped backward for the first time this year, first home buyers are deserting the market, official figures show.

The Bureau of Statistics Housing Finance data shows that the number of new mortgages to owner occupiers dropped by 3.9 percent in August to 49,912, seasonally adjusted. The value of loans to property investors held steady.

In the three months to August, the number of loans to owner occupiers for the construction and purchase of new homes rose by 0.3 per cent and was 13.3 per cent higher than the same period in 2012.

This included a 0.2 per cent increase in the number of loans for the construction of a new dwelling during the three months to August, with lending in this segment up 3.6 per cent compared with the same period of 2012. The number of loans for the purchase of new homes was 0.6 per cent higher in the three months to August :: Read the full article »»»»

RELATED! Australian House Prices Slip For Second Straight Month

Australian House Prices Slip For Second Straight Month

Australian capital city home prices have ended in the red for the second year in a row. The latest home value index from real estate analysts RP Data and Rismark shows capital city prices eased 0.3 per cent in December, to be 0.4 per cent down over the year. That is a better result than 2011′s 3.8 per cent decline.

RP Data spokesman Cameron Kusher says home prices improved slightly over the second half of 2012. “Capital city home values remain 5.7 per cent lower than their historic highs of November 2010, however, dwelling values are up 1.8 per cent from their low of late May 2012,” he noted in the report.

Hobart remained the nation’s cheapest capital city to live in, with a median price of $317,500. Prices in the Tasmanian capital were virtually unchanged over 2012, but rose 0.7 per cent in December. Melbourne had the worst price declines over the past year, with home values down 2.9 per cent, despite a 0.5 per cent rise in December. Brisbane and Adelaide saw 0.8 per cent declines over the past year, while Perth had a 0.8 per cent rise. The nation’s capital saw prices down 0.3 per cent in 2012, with Canberra home values sliding 1 per cent in December :: Read the full article »»»»


source: hia
source: abs
image source: indeepmedia

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