2017-04-11 P&E Agenda Attachment 1 to Item 1 Housing Needs Assessment

       Median household income – Median household income from the 2011 Census (ABS
        2013a) is adjusted each quarter based on the wage price index for Queensland for total
        hourly rates of pay (excluding bonuses) for all sectors and all industries (ABS 2016 Table
        2B A2600949X). The 30% benchmark is used as this is the indicative proportion of
        household income that is considered reasonable for low income households to spend on
        accommodation costs without experiencing housing stress.
       Median weekly mortgage repayments for attached and detached dwellings – Median
        mortgage repayments have been calculated based on the median sale price of attached
        and detached dwellings in the areas from Queensland Treasury data (Queensland
        Government 2016e) and average variable bank mortgage rates for owner occupiers as
        published by the Reserve Bank of Australia (2016) assuming a 20% deposit and 25 year
        loan period. Weekly repayments assume a month has four weeks.
       Median rents for attached and detached dwellings – Median rents are based on new
        bonds lodged with the RTA (2016) each quarter and are for two bedroom attached
        dwellings and three bedroom detached dwellings only.

The results of the analysis are shown in Figure 36 to Figure 38, and a number of observations
can be made about the results:

       For Noosa Shire, Sunshine Coast LGA and Brisbane City LGA, median mortgage
        repayments for attached and detached dwellings generally declined during the start of the
        period, before levelling off and starting to trend upward during the latter half of the
        period. The decline was partly due to median sale price declines early in the period,
        however falling average variable home loan interest rates have also contributed to the fall
        in median mortgage repayments. The affordability of mortgage repayments is heavily
        impacted by the variable home loan interest rate charged, including any discounting that
        is provided (not included in this analysis), and therefore changes in interest rates may
        quickly change the affordability of the dwellings in the regions analysed.
       For a household earning a median income in Noosa Shire, renting or purchasing a median
        priced dwelling was unaffordable throughout the time period. Renting a 2-bedroom
        attached dwelling was the most affordable option throughout the time period. With falling
        interest rates during the period, mortgage repayments on an attached dwelling became
        more affordable, and median mortgage repayments on an attached dwelling were more
        affordable than renting a median priced 3-bedroom detached house at the end of 2015.
       For a household earning a median income in the Sunshine Coast LGA, renting a 2-
        bedroom attached dwelling was affordable throughout the time period analysed, and
        purchasing an attached dwelling became affordable in the last 12 months or so.
       With higher median household incomes in the Brisbane City LGA, households have more
        affordable options when it comes to accommodation – including renting a median priced
        2-bedroom attached dwelling, or 3-bedroom detached dwelling, or purchasing a median
        priced attached dwelling.




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