ACT market remains strong, PRDnationwide report

The ACT has topped the nation in dwelling approvals, the median weekly family income and home loan affordability, according to the latest report from PRDnationwide.

Released quarterly, the Q2 2018 Key Market Indicators report measures 12 key market indicators in each state and territory to determine the strength of the property markets. Overall, the ACT placed second in the report, behind VIC.

The ACT recorded the highest growth of dwelling approvals in the report at 58.2 per cent. This comes after the ACT topped the nation in the March 2018 ABS Building Approvals release.

Median weekly family income in the ACT also led the nation at $2664, beating second placed NT by $551.

ACT was given an index reading of 51.0 for home loan affordability. This score is a ratio of the median family income to the average loan repayment. The higher the value of the index reading, the more affordable the market.

This is the fifth consecutive quarter the ACT has recorded the highest level of home loan affordability.

PRDnationwide national research manager, Dr Diaswati Mardiasmo, attributed ACT’s affordability to the rise in dwelling approvals and the continually high median weekly family income.

“Dwelling approvals over the past 12 months to March 2018 have increased by 58.2 per cent, but in the same time the ACT’s net migration has only increased by 35.8 per cent,” she said.

“From my perspective, if there are more dwelling approvals than net migration. It means there should be enough supply coming into the market to satisfy the demand.

“As a result, it keeps the pricing balanced and because of that I expect the ACT’s price affordability to continue on.”

The Domain March Quarter 2018 House Price Report, released last month, showed Canberra’s median unit price had dropped to a four-year low to $411,004, with some in the industry attributing this on a heightened supply of units.

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First home buyer loans also increased by 64.4 per cent in the ACT, sitting just behind NSW.

On the national level, Dr Mardiasmo said there’s a shift starting to occur in the property markets.

“For the past 24 months or so, NSW and Victoria have been more unaffordable and Queensland and Tasmania have been more affordable,” she said.

“NSW and VIC are starting to do better when it comes to the growth of first home buyer loans and home loan affordability, whereas Queensland and Tasmania are faring worse.

“Historically, more unaffordable states are becoming more affordable, and historically, more affordable states are starting to become unaffordable.”

Dr Mardiasmo expects the ACT market to remain strong.

“At the moment based on all the factors, I wouldn’t be surprised if the ACT’s strong performance continues in the next release,” she added.