Securing a good deal on your home loan has never been more important, as it emerges that properties in many parts of Australia are becoming less affordable.
The latest Adelaide Bank/ REIA Housing Affordability Report looked back on the September quarter to find affordability concerns in five states and territories. This has led to an increase in the size of the home loans needed to meet the cost of the nation's properties.
The facts and figures
Analysis by the Real Estate Institute of Australia (REIA) shows the average family dedicates around 31.7 per cent of their income to meet loan repayments. This marked a rise of 1.4 per cent from the previous quarter and is 1.3 per cent higher than a year earlier.
Figures seem to suggest you might find yourself in need of a bigger mortgage.
However, real estate in Perth and Canberra may nevertheless remain appealing, as these were the only two areas where less of a family income is needed to make loan repayments. It remained unchanged in the Northern Territory.
The news was less positive for real estate in Sydney, as New South Wales witnessed the greatest fall in housing affordability.
"New South Wales is still the only state or territory with an average loan size above $400,000, however Victoria follows closely at $390,503," noted REIA President Neville Sanders.
Snapshot of the nation's capitals
The Australian Bureau of Statistics (ABS) has recognised a similar trend. The Residential Property Price Index for the September quarter showed 10.7 per cent growth in home values across the country's capitals over the past year.
Again, it was real estate in Sydney that witnessed the greatest growth, up 19.9 per cent between the September quarters of 2014 and 2015. This was followed by Melbourne with a 9.9 per cent rise.
Home loan approvals must keep pace
These figures seem to suggest you might find yourself in need of a bigger mortgage, but the good news is there's an increased chance of being approved for one.
It's essential to save up a substantial deposit and make sure you get the best deal from your mortgage broker, especially if you're buying in one of the capital cities.The ABS revealed a 0.4 per cent rise in the value of dwelling commitments for owner-occupied housing between September and October this year. Fixed loans for investment housing, on the other hand, registered a 6.1 per cent decline.
