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1301.0 - Year Book Australia, 2012  
Latest ISSUE Released at 11:30 AM (CANBERRA TIME) 24/05/2012   
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Housing

HOME BUYERS

For most Australians, buying a home involves raising a deposit and then borrowing a substantial amount of money from a bank or other lending institution, which then holds a mortgage on the property. The amount borrowed is influenced by a number of factors including the price of the property, the amount of the deposit, the policy of lenders regarding borrowing limits and the ability of the borrower to repay the loan. The last is, in turn, influenced by household income and housing loan interest rates.

During the period from 1994–95 to 2010–11, the number of dwellings financed has grown overall. In 2010–11, banks and other lending institutions financed 580,000 dwellings for owner occupation, 68,000 fewer than in the previous year, but still 28% higher than in 1994–95. While the number of established dwellings financed grew from 348,000 in 1994–95 to 496,000 in 2010–11, the number of new dwellings financed for construction or purchase declined from 103,000 to 83,000 over the same period (although there was a jump to 104,000 in 2009–10) (graph 10.14). In 2010–11, new dwellings represented 14% of all dwellings financed in Australia. Western Australia had the highest proportion of new dwellings financed (20%) and New South Wales had the lowest (10%).

Graph 10.14 Dwellings financed(a)



Between 2002–03 and 2010–11, project home prices increased by an average of 40%, while established house prices increased by an average of 71%. Movements in established house prices were more volatile. They increased from 2002–03 to 2003–04, levelled off in 2005–06, again increased until 2007–08, then declined slightly in 2008–09 before rising again to their 2010–11 level (graph 10.15).

Graph 10.15 House price indexes(a)



Average loan sizes increased along broadly similar lines to house prices between 1994–95 and 2010–11. For most of the period, the average loan size for first home buyers was slightly less than for changeover buyers (graph 10.16). However, in 2008–09, first home buyers' average borrowings slightly exceeded those of changeover buyers, before dropping back below them in the two subsequent years. In 2010–11, first home buyers borrowed an average of $281,000, which is $45,000 less than the average loan size of changeover buyers, the largest such difference since the series began.


Graph 10.16 Average loan size(a)



Differences in average loan sizes between states and territories tended to reflect differences in median house prices (table 10.17). Average loan sizes in 2009–10 were highest in New South Wales ($302,000) and Western Australia ($290,000), and lowest in Tasmania ($194,000).


10.17 HOUSING FINANCE FOR OWNER OCCUPATION, HOUSE PRICES AND PROPERTY VALUES
NSW
Vic.
Qld
SA
WA
Tas.
NT
ACT
Aust.

Dwellings financed 200910
New dwelling built or purchased(a)'000
20.0
33.8
19.9
7.6
17.7
1.7
0.5
2.0
103.5
Established dwelling purchased(b)'000
171.8
129.8
111.8
45.1
61.3
10.3
4.5
10.1
544.6
All dwellings financed'000
191.8
163.6
131.7
52.7
79.0
12.1
5.1
12.0
648.1
Average loan size 200910
First home buyers(c)$ '000
303
270
280
237
292
199
303
289
281
Non-first home buyers$ '000
302
275
275
216
289
193
278
265
278
All dwellings financed$ '000
302
260
276
220
290
194
282
270
279
Change in capital city Project Home Price Index from 200203 to 200910(d)%
26
23
47
31
71
48
66
33
37
Change in capital city Established House Price Index from 200203 to 200910(e) %
25
85
101
90
140
125
147
71
66
Median price of capital city established house transfers March Qtr 2009(f)$ '000
583
469
460
404
518
352
529
540
na
Median estimated value of all owner occupied dwellings 200910(g)
Capital city$ '000
550
480
470
400
500
350
520
500
490
Balance of state$ '000
370
280
400
291
400
300
400
na
350
Total $ '000
450
410
435
370
490
320
500
500
440
Average amount of mortgage outstanding 200910(h)
Capital city$ '000
239
207
220
180
232
140
247
223
219
Balance of state$ '000
168
138
202
124
172
126
195
na
169
Total$ '000
214
188
210
167
220
132
235
223
202

na not available
(a) A new dwelling is one that has been completed within twelve months of the lodgement of a loan application, and the borrower will be the first occupant.
(b) An established dwelling is one that has been completed for twelve months or more prior to the lodgement of a loan application, or that has been previously occupied.
(c) Persons entering the home ownership market for the first time.
(d) Measures change in the cost of building a new house on buyer's own land.
(e) Measures change in prices paid for house and land, including new house/land packages.
(f) Prices paid for established houses (including land) purchased in the reference period.
(g) Householder's own estimate of the market value of their dwelling at the time of the survey.
(h) Only includes owners with a mortgage.
Source: Housing Finance, Australia (5609.0); House Price Indexes: Eight Capital Cities (6416.0); Housing Occupancy and Costs, Australia (4130.0).


Between 1994–95 and 2009–10, the average real disposable income of households who were lone persons under 35 years increased by 65%. That of couple only households with a reference person under 35 years increased by 45%, and that of couples with dependent children increased by 66% (graph 10.18). In the same period, the average loan size, after adjustment for inflation, increased by 99%.

Graph 10.18 Average real disposable household income(a)(b)



Approximately 1.1 million Australian households bought a home in the three years prior to the 2009–10 Survey of Income and Housing (which was conducted during the 12 months ended June 2010). Of these, 40% were first home buyers and most were young households with a reference person aged under 35 years (67%) (table 10.19). About 10% of first home buyer households had a reference person aged 45 years and over. In contrast, more than half (52%) of changeover buyer households had a reference person aged 45 years and over.

Changeover buyers are often able to use the substantial equity in their previous dwelling as a deposit on a more expensive 'upgrade'. Many will be able to discharge their mortgage quickly and some may not need to borrow at all. In 2009–10, the estimated median value of dwellings occupied by changeover buyers was $450,000 compared with $370,000 for first home buyers. While changeover buyers had slightly larger outstanding mortgages than first home buyers, the proportion of owners with a mortgage was lower (73% compared with 93%).

Consequently, average weekly housing costs of changeover buyers were lower than for first home buyers – $387 compared with $460. Changeover buyers also spent a smaller proportion of household income on housing than first home buyers – 18% compared with 23%.


10.19 RECENT HOME BUYERS(a), Selected household characteristics—2009–10

Recent home buyers

First home buyer(b)
Changeover buyer(c)
All recent home buyers
All owner households

PROPORTION OF HOUSEHOLDS WITH REFERENCE PERSON AGED:

Under 35 years
%
66.6
17.7
37.2
11.8
35–44 years
%
23.6
30.7
27.9
19.1
45–54 years
%
7.3
23.6
17.1
22.5
55–64 years
%
*1.7
16.4
10.5
20.7
65 years and over
%
**0.8
11.6
7.3
25.9

PROPORTION OF HOUSEHOLDS IN SELECTED FAMILY/HOUSEHOLD GROUPS

Lone person
%
20.4
17.8
18.8
21.4
Couple only
%
32.7
28.1
29.9
29.8
Couple family with dependent children
%
31.3
38.9
35.9
29.2
One parent with dependent children
%
3.6
4.9
4.4
3.7
Proportion of households that built/purchased a new dwelling(d)
%
18
23
21
na
Estimated mean value of dwelling(e)
$'000
404
553
494
530
Estimated median value of dwelling(e)
$'000
370
450
420
440
Proportion of households with a mortgage
%
93
73
81
53
Mean amount of mortgage outstanding(f)
$'000
280
289
285
190
Average weekly housing costs
$
460
387
417
232
Housing costs as a proportion of income
%
23
18
20
13
Estimated number of households(g)
'000
429.0
644.8
1 073.8
5 774.9

na not available
* estimate has a relative standard error of 25% to 50% and should be used with caution
** estimate has a relative standard error greater than 50% and is considered too unreliable for general use
(a) Households that built or purchased their dwelling in the three years before the survey.
(b) Recent home buyer households in which neither the reference person nor their partner had previously owned a dwelling.
(c) Recent home buyer households in which either the reference person or their partner had previously owned a dwelling.
(d) A dwelling is new if it was built under contract for the current owner or purchased from a builder/developer and the current owners are the first to live in it.
(e) Householder's own estimate of the market value of their dwelling at the time of the survey.
(f) Only includes owners with a mortgage.
(g) Includes all family and household groups.
Source: ABS data available on request, Survey of Income and Housing.

 

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Statistics contained in the Year Book are the most recent available at the time of preparation. In many cases, the ABS website and the websites of other organisations provide access to more recent data. Each Year Book table or graph and the bibliography at the end of each chapter provides hyperlinks to the most up to date data release where available.


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