A new report has revealed that housing in Australia is now at its most affordable level since the 2009 global financial crisis, reported The Age.
The HIA-CBA Housing Affordability Index monitors the link between home prices, mortgage costs and household income. It showed that conditions have improved significantly for potential home buyers.
Due to interest rate cuts, rising wages and minimal home price growth, affordability levels across Australia rose 5.5 percent in Q4 2012, an 18 percent jump year-on-year.
Melbourne’s affordability level climbed 4.1 percent in Q4 and 25 percent since the market’s peak in December 2010. Levels in Sydney increased by 5.3 percent and is still Australia’s least affordable city. On the other hand, Hobart is considered the most affordable city.
“For regional areas, affordability is at levels last seen during the early 2000s decade,” said Shane Garrett, HIA’s senior economist.
“It is worth noting that affordability would be even more favourable to householders had recent RBA rate cuts been passed on fully by lenders.”
While interest rate cuts by the reserve bank and slower growth in home prices have improved affordability, sales activity is still sluggish, Garrett added.
Shabnam Muzammil, Senior Journalist at PropertyGuru, wrote this story. To contact her about this or other stories email shabnam@propertyguru.com.sg
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