Property Market Information: Home affordability on the mend

By the resi financial blog team, 09 December 2014

Home affordability on the mend

The affordability of Australian homes has been a contentious issue of late, but recent home value figures should surprise (and delight) home buyers who have struggled to get onto the property ladder. This will also come as good news to rental investors who could expect better yield from new purchases.

According to a December 1 release by CoreLogic RP Data, the Home Value Index fell by 0.3 per cent in November across the capital cities. While the month-on-month result was a decrease, the figure for the quarter to November is a moderate rise of 0.8 per cent.

Interestingly, this small rise for the quarter is focused mostly in Sydney (3.1 per cent), Brisbane (1.7 per cent) and Perth (0.4 per cent). All other capital cities experienced a quarterly decline in home values of between 0.5 and 3.3 per cent. This is great news for first time buyers across the country looking to break into the market.

Sydney is not the only market out there

With all the news and hype around the impressive growth in real estate values in Sydney, it could be easy to think that the rest of the country is simply tagging along for the ride. However, this is not the case. While Sydney has had the highest growth over the past year (13.2 per cent), with Melbourne a close second (8.3 per cent), the historical performance of these cities is not as impressive as one might think.

For those that have held onto property for around 10 years, surprisingly, Sydneysiders will not have seen the most gain. The capital city with the best growth over the past 10 years is in fact Darwin with 7.9 per cent. Ironically, Darwin has grown the least over the last year with a 1.4 per cent increase in value according to the figures from RP Data. This goes to show that the most immediate statistics are not always the most relevant.

Perth had the second biggest growth for the decade, with 6.7 per cent, followed by Melbourne at 6.1 per cent and Sydney at 4.2 per cent.

First time buyer resurgence

Amanda Lynch, CEO of the Real Estate Institute of Australia noted that research conducted by the industry body had revealed that the number of first time home buyers had picked up in markets that had experienced moderating growth.

Western Australia was the big winner in this regard, with 20.7 per cent of the owner-occupied market comprising of those purchasing their own home.

If you're looking to take advantage of reductions in the price of property in your neck of the woods, a home loan is probably on the cards. Call up a resi loan specialist to find out how they can match a home-lending product to your situation.

Categories: Home Loans, Property Investment