Inside Property
Record Change for Affordability
According to a report released by the REIA a week ago, the proportion of
family income required to meet mortgage repayments has seen a record change.
The figures collected showed that the percentage of family income decreased
nationally from 38.8% in the September quarter to 32.4% in the December
quarter, 2008. Housing affordability improved dramatically during this time due
to a combination of interest rate reductions, Government incentives and the
changing market itself. It’s the largest quarterly change ever recorded since
calculations were first made in 1995, according to the REIA president Noel
Dyett. With a succession of dramatic rate cuts by the RBA, the average mortgage
in Australia is now in excess of $300 per month less than what it was in
September last year. It presents as great news for the many home owners who
struggled with the hikes implemented throughout the earlier part of 2009. The
first home buyers are also enjoying unprecedented opportunities to secure their
own property, with repayments comparable to rents in some areas. Although there
is a prevailing climate of fear in regards to the global economic situation, it
is poignant to note that the benefits of falling petrol, property and grocery
prices are being welcomed by many. Evidence is beginning to emerge that
consumer confidence levels, which have taken a battering akin to what we
enjoyed from Cyclone Hamish through out the week, are not correlating with the
underlying facts. For the sake of the analogy, we could say whilst all eyes are
on the sky waiting for the storm to hit, the storm may pass leaving us
windblown, soggy but otherwise intact.
Till next week,Olivier