An outcome of the global economic downturn has been the dramatic reduction in official interest rates. This has provided prospective homebuyers with improved affordability, which have been welcomed after enduring a period of feeling ‘locked out’ of the market as property prices experienced unprecedented growth.
The release of the Real Estate Institute of Australia quarterly housing affordability report reveals that the recent heavy reduction in interest rates translates to an average monthly saving of $336 for most Australian households. In Victoria, the saving was just over $300: down from $2,161 in the September quarter to $1,850 in December. The further 1 per cent reduction in February has provided further savings for households.
For prospective property buyers, the rate cuts combined with the Federal Government’s increased grants and bonuses has offered new opportunities to purchase more affordable housing across the nation with just over 35,000 first homebuyers acquiring housing finance in December, up 25.5 per cent from the September figure of 28,008.
This is likely to continue as the June 30 deadline for the boost to the first homeowner grant approaches.
Looking specifically at Victoria, the proportion of family income needed to meet loan repayments in the December quarter was 32.1 per cent, down from 37.7 per cent in September and 36.2 per cent in June.
If interested in learning more about this update please contact me today!
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