Q4 2017 PRD Key Market Indicators - New South Wales
Believe it or not… New South Wales’ (NSW) home loan affordability decreased at a slower rate in comparison to Victoria, -1.5% versus -2.0% respectively, over the past 12 months (to June 2017). This is the first time this has happened in 3 years, potentially suggesting a shift in unaffordability in Melbourne and the return of sustainable rate of price growth in Sydney.
The PRD Q4 2017 Key Economic Indicators provide consumers with a quick snapshot of the current state of affairs from an economic and property perspective. The PRD Key Economic Indicators cover both national and state level data, comprising of:
- Number of first home buyer loans
- Home loan affordability index
- Number of dwelling approvals
- Consumer sentiment index
- Standard variable loan
- Consumer price inflation index
- Unemployment rate
- Weekly family income
- Nett migration
A key finding for NSW was in relation to potential future demand for residential real estate, as nett migration has increased by 37.1% over the past 12 months (to March 2017), currently at 28,093 people. Dwelling approvals in September 2017 were recorded at 6,306, which is relatively stable when compared to the 6,306 dwellings approved 12 months prior. This suggests a potential undersupply in the market - welcome news not only for astute investors but also developers looking for new residential and/or mixed-use projects.
NSW recorded the lowest home loan affordability index point of 26.3, this was below the Australian average of 31.8 index points. Surprisingly, NSW did not have the greatest decrease in affordability in the June quarter, as it only declined by 1.5%. Victoria on the other hand, decreased by 2.0% over the same period of time. This suggests there is a potential shift in which state will be the most unaffordable across the nation.
Although the number of first home buyer loans in NSW has decreased by 3.4% over the past 12 months (to June 2017), this was not the largest decline in the country. It was in fact 4th behind Victoria, South Australia, and Tasmania. This is potentially due to the slight softening in the Sydney property market as well as an annual increase of 2.2% in median weekly income.
For a closer look at the PRD Q4 2017 Key Economic Indicators visit PRD.com.au/research-hub