The ACT property market has recorded the highest level of home loan affordability in Australia, according to a new report by PRD Nationwide released on Tuesday.
The ACT was given a home loan affordability index reading of 50.6 points. This exponentially surpasses the Australian average of 31.8 index points and is significantly above NSW, which recorded the lowest score at 26.3.
ACT also recorded the highest growth in the number of first-home buyer approved loans, at 21.8 per cent over the past 12 months (to June 2017). This is good news for ACT residents, especially those wanting to enter the market, and confirms that the time to buy is now.
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.
PRD Nationwide national research manager Dr Diaswati Mardiasmo??? says ACT's home affordability is attributed to its high weekly family income. Currently sitting at $2632, it indicates wage growth and strong potential for future economic growth.
"It is interesting because property prices in the ACT have increased but so has the median family income. This has increased by 1.8 per cent," she says.
"It means you can make the average loan repayments easily and still have disposable income."
This growth can be potentially attributed to Canberra's high employment rate. The unemployment rate in the ACT is sitting at 3.3 per cent. Not only is this the lowest in the nation but it also represents a decrease of 5.7 per cent - almost double the Australian average decrease of 3.6 per cent.
Nicole Semmler, 23, first bought an off-the-plan one-bedroom apartment in 2015, and had her home loan approved earlier this year.
"Living in Canberra meant it was affordable to buy a one-bedroom apartment relatively close to the city centre," she says.
"In other capital cities I wouldn't have had this opportunity."
Semmler received a first-home buyers grant of $7000, however, she says she would have gone ahead with the purchase without this.
Mardiasmo says: "In a growing, affordable property market people think why would I rent, I should just buy.
So a lot of people then become first-home buyers and that is why we have seen that spike."