Q4 2019 Key Market Indicators
First home buyer confidence is slowly moving upwards
The number of first home buyer loans approved across Australia in the June quarter of 2019 was 26,250, which represents a -7.6% decline in the past 12 months. Despite a decrease in the number of first home buyer loans, this is a smaller decline compared with the -11.6% that occurred between the March quarter of 2018 and the March quarter of 2019. It is still bigger than the -5.8% decline seen between the December quarter of 2018 and the December quarter of 2019, however, a return to a single-digit percentage figure suggests that first home buyer confidence is slowly improving. This is welcomed news, particularly post the Federal Government election.
The Australian home loan affordability index sat at 32.2 points in the June quarter of 2019, which is representative of a 3.5% increase in the past 12 months. This would have assisted first home buyers, particularly as traditionally more expensive states such as New South Wales and Victoria experienced an increase in the home loan affordability index, of 2.3% and 5.1% respectively. Western Australia (WA) leads the nation in home loan affordability growth, increasing by 6.7% in the 12 months to the June quarter of 2019. WA’s home loan affordability index was at 44.6 points in the June quarter of 2019, which placed the state third in the nation behind the Northern Territory and Australian Capital Territory, at 48.5 and 48.4 index points respectively. WA presents a unique opportunity for first time investors who are looking for more affordable options.
The Australian median weekly family income was $1,783 in the June quarter of 2019, representative of a 2.6% increase in the past 12 months. That said, the Australian unemployment rate increased to 5.2% in September 2019, up from 5.0% in September 2018.
The Federal Government recognises that saving a
deposit has become a significant barrier to entering the housing market, thus
they have introduced a 5% home deposit incentive for first home buyers, which
will begin in January 2020. The Reserve Bank of Australia has cut cash rates
three times in the past six months, bringing the standard variable loan to 4.80%
in October 2019, a decline of -10.1% in the past 12 months. The combination of
these should result in stronger first home buyer confidence for the rest of
2019, and as we enter 2020.
The PRD Q4 2019 Key Market Indicators provide a quick snapshot of the current state of the market in Australia from both an economic and property perspective. The Indicators cover both national and state level data, comprising of:
- Number of loans to first home buyers
- 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