Streets Ahead : Streets Ahead Edition 11
Overall index movement The increase in September 2015 was driven by the lower proportion of respondents using more than 50% of their income to service debts, which fell from 29% in March 2015 to 23% (see Figure 1). This coincides with the Reserve Bank of Australia’s (RBA) official cash rate cut in May 2015, to 2.00%, which would have improved the affordability of mortgage repayments for many Homeowners. However, despite the cash rate cut in May 2015, the proportion of respondents who believe now is a good time to buy a home fell from 52% to 48% between March and September 2015. It is likely that the benefits of the cash rate cut were overshadowed by the surge in property prices, with the CoreLogic RP Data Home Value Index showing that the median dwelling price across all capital cities increased by 5.3% over the quarter and 10.2% over the year to August 2015. Both experienced and expected mortgage stress remained low in September 2015. The proportion of Homeowners who expected mortgage stress remained stable at 16% while the proportion of Homeowners who experienced mortgage stress increased slightly to 18% (up from 16% in March 2015). Higher cost of living (38%), followed by unemployment (19%) and other debt obligations (19%), continue to be the most common reasons for those who experienced mortgage stress. Higher cost of living (39%), unemployment (24%) and underemployment (fewer hours worked or lower pay for same work) (16%) were the most common reasons for expecting difficulty with making mortgage repayments over the next year. The proportion of respondents who are comfortable with borrowing more than 80% of their property value remained steady between March and September 2015, at 24%. Figure 1. Genworth Homebuyer Confidence Index Streets Ahead | Genworth Homebuyer Confidence Index - September 2015 4 HCI rose by 0.4% from 99.2 to 99.6, a new post-GFC high September 2015 saw the third consecutive increase in the national HCI. Between March and September 2015, the HCI rose slightly by 0.4% from 99.2 to 99.6, a new post-GFC high. This follows an increase of 8.0% in September 2014 and a further increase of 1.1% in March 2015. Source: Genworth Figure shows HCI as at September 2015 (99.6), all-time low in March 2014 (90.8) and all-time high in 2007 (100.0).
Streets Ahead Edition 12