‘Large discrepancy’: Average state loan v median house prices

As a series of examples, the below has been broken down by PRD. The figures have been taken from the December quarter:

Brisbane, Qld

• Median house price: $542,000
• Average state loan: $412,297

Sydney, NSW

• Median house price: $1,142,212
• Average state loan: $592,338

Melbourne, Vic

• Median house price: $859,500
• Average state loan: $493,471

Hobart, Tas

• Median house price: $550,000
• Average state loan: $334,941

“Finding an affordable property option in capital cities can be difficult, especially for first home buyer[s],” the PRD report noted.

“Despite a lower cash rate and more lenient lending practices, there is still a large discrepancy between the average state loan and median house price in capital cities. For example, 51.9 per cent in Sydney and 76.1 per cent in Brisbane.

“Further attributing to the challenge are capital cities, which have experienced solid growth in their median house prices, with the December quarter 2019 reporting a weighted average Australian median house price of $775,918 (representing annual growth of 5.8 per cent).

“The Australian median family weekly income grew by 2.5 per cent over the same period of time, resulting in the home affordability index declining by -4.3 per cent. Although housing affordability in major capital markets continues to be challenging, regional areas should not be dismissed.”

In addition, the report noted that regional areas have seen strong investment into residential, commercial and infrastructure developments over the past 24 months.

“Further, regional markets tend to be more insulated to economic shocks,” it said.