The HIA released its quarterly housing affordability index and it’s good news, with four staright quarters of cheaper house buying:
A lift in housing affordability in the December 2011 quarter marks four straight quarters of improvement, meaning conditions are steadily getting better for those trying to enter home ownership says the Housing Industry Association, the voice of Australia’s residential building industry.
The HIA-Commonwealth Bank Housing Affordability Index improved by 2.2 per cent in the December 2011 quarter, an outcome which took the Affordability Index to a level that is 8.3 per cent above the level registered in the December 2010 quarter.
“A decrease in mortgage lending rates and continued earnings growth more than offset a modest increase in the median dwelling price to further improve housing affordability in the December 2011 quarter,” said HIA’s Senior Economist, Mr Andrew Harvey.
“As expected, the interest rate cuts in November and December of last year saw housing affordability continue to trend in the right direction. When the recent improvements in affordability are considered alongside the easier access to skilled trades as home building activity has eased, it increasingly looks like a good time to buy a new home for those financially able to do so,” said Mr Harvey.
In the most recent quarter average weekly ordinary time earnings posted growth of 0.5 per cent and mortgage lending rates were down by a sizeable 0.25 percentage points. Meanwhile, home prices rose by 0.5 per cent in the December quarter although they were down by 1.8 per cent over the year.
Housing affordability in the December 2011 quarter improved in Australia’s capital cities with the exception of Adelaide. Sydney improved by 3.5 per cent, Melbourne by 4.6 per cent, Brisbane by 7.9 per cent, Perth by 4.1 per cent, Hobart by 3.1 per cent and Canberra by 6.1 per cent. Adelaide’s housing affordability declined by 3.6 per cent over the quarter.
Outside of the capital cities, affordability improved in New South Wales (up by 0.5 per cent), Victoria (up by 7.8 per cent), and Tasmania (up by 0.3 per cent). Meanwhile, non-metro affordability declined in Queensland (down by 0.1 per cent), South Australia (down by 2.0 per cent), and Western Australia (down by 5.5 per cent).
Here’s the chart that proves that things are “steadily getting better for those looking to enter home ownership”:
That’s definitely an improving trend. However, a longer term chart might be useful, remembering that a higher score equates to better affordability:
We’ve almost climbed back to the bubble trough levels of 2003! Didn’t the bubble end that year?
