Housing affordability is at its most favourable level in 12 years.
The HIA-Commonwealth Bank Housing Affordability Index improved by 2.1% during the first quarter of 2014 and affordability is now 10.8% more favourable than a year ago.
Housing Industry Association (HIA) Senior Economist Shane Garrett says:
“The continuation of record low interest rates, combined with decelerating home price increases and growth in earnings over the quarter saw the HIA-CBA Housing Affordability Index improve to its most favourable level since March 2002.”
The impact of lower interest rates and continued earnings growth has ensured home purchase affordability has improved over the past year for existing home owners and those on the cusp of entering the market.
The Reserve Bank has signalled interest rates will remain low for some time.
In the March 2014 quarter, the HIA-CBA Housing Affordability Index improved in two of the six surveyed capital cities: Sydney (+2.2%) and Perth (+0.1%).
Affordability was unchanged in Melbourne during the quarter.
Three of the six capital cities saw affordability deteriorate during the March 2014 quarter: Adelaide (-4.6%); Hobart (-1.3%); and Brisbane (-0.7%).
Affordability in the Australian Capital Territory saw an improvement of some 7.7%.
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