Best Chance To Buy A Home Since 1986

Home loans continue to be more affordable because the median Sydney metropolitan residential property price remained stable in the December quarter.

The Real Estate Institute of NSW (REI) says an improvement in the interest rates being offered by the major banking and financial institutions has contributed to the better situation.

The REI president, Mr John Nicoll, believes that the latest home loan affordability figures from the institute's national body indicate that it has rarely been easier to buy a home.

"With further falls in interest rates combined with marginal gains in median family income, home loan affordability is at its best recorded level since 1986," he said.

The home loan affordability ratio calculates average new loan repayments as a percentage of median family income.

The median annual family income required to meet an average monthly loan repayment had decreased by about 24 per cent in the past year. That, combined with the fact that median house prices in Sydney had remained stable, meant that buyers were well placed.

"The fact that variable introductory interest rates have come down from around 12 per cent in December 1991 to 7.8 per cent in the corresponding quarter of 1992, indicates that the ground work is now in place for steady growth throughout 1993," Mr Nicoll said.

The institute reported that property investors were showing more interest in the residential property market.

"With attractive interest rates being offered, combined with stable property prices, most agents should be confident that renewed interest on the part of owner-occupiers and investors will lead to a more active market for the remainder of 1993.

"Some, however, are still cautious, with the continued high level of unemployment and a subdued economy as the major constraints preventing any significant market turnaround," he said.