The results are in: New South Wales’ home loan affordability has increased by 3.7% over the past 12 months, to 27.7index points. Although still the lowest index reading compared to the rest of Australia, its affordability growth is on par with Queensland (3.6%).
The PRDnationwide Q3 2017 Key Economic Indicators provide consumers with a quick snapshot of the current state of affairs from an economic and property perspective. The PRDnationwide Key Economic 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
A key finding for New South Wales is in relation to potential future demand for residential real estate, as nett migration has increased by 22.9% over the past 12 months to December 2016, currently at 16,600 people. Dwelling approvals in June 2017 is recorded at 5628, which is a 6.8% decrease over the past three months, and a 14.2% decrease over the past 12 months. This suggests a potential undersupply in the market, a welcome news not only for astute investors but also developers looking for new residential and/or mixed-use projects.
New South Wales recorded the lowest home loan affordability index point of 27.7, below the Australian average of 32.9 index points. Not surprisingly the number of first home buyer loans has decreased by 5.2% over the past 12 months, currently at 3597. That said NSW approves a higher number of first home buyer loans than South Australia, Tasmania, Northern Territory, and the ACT; all of which has a lower median property price than NSW.
There is a good news in the unemployment rate, which decreased to 5.0% in July 2017 and is far below the Australian unemployment rate of 5.6%. Furthermore, weekly family income has increased by 2.1% (on par with the Australian average of 2.2%) to $1,688; suggesting wage growth and strong potential for future economic growth.