Every quarter, mortgage brokers and others in the home loan industry receive a document commissioned by the Adelaide Bank and the Real Estate Institute of Australia (REIA) called the Housing Affordability Report. Though our main territory covers the Rockingham, Baldivis and Kwinana areas, we find national trends are very relevant to us; they remind us how great we have it here in WA.

The report for the September quarter had four statistics that we feel are important for WA and for Australia.

Median Family Incomes Increased

Over the last 12 months, the median family income in every territory and state increased. We think this is a great sign that economic recovery is in full swing for all of Australia. When there is more money to go around, there is more activity in all segments of the economy.

Loan Size Increase Kept in Check

In every territory and state except QLD, the average loan size increased less than 5%. We like to see loan sizes increasing because it indicates a healthy economy but we don’t like to see them increase too much. Under 5% is a good number.

First Home Buyer Loans Increased in Most States

In every state except NSW and QLD, the number of loans for first home buyers increased. In NSW and QLD, they decreased substantially. The increases are due to a combination of a better economy, more consumer confidence and favourable changes in First Home Owner Grants from state to state.

ACT Stays on Top

Australian Capital Territory is still the most affordable place to live due to high incomes and housing prices that haven’t risen as fast as incomes. We should all be so lucky.

Two Takeaways

First of all, the record low RBA interest rate is doing what it was intended to do—stimulating the housing market by making housing more affordable. Investors and families alike are seeing the benefits of lower interest rates.

A corollary benefit is that many investors are choosing fixed rates so that they can enjoy the low rates for longer. This helps investors by decreasing costs, both on the front end and during the body of the loan.

Are You Ready?

Call us about a home loan and take advantage of low interest rates before they rise: 0408 912 244.