29 April 2016 REIA
Affordability improved 2.7% during the March quarter, and was 0.4% more favourable than for the same period last year.
"The national median dwelling price fell during the March 2016 quarter and this was the main factor behind the improvement in affordability during the first quarter of the year," said HIA Senior Economist, Shane Garrett.
"Had it not been for the shock increase in variable mortgage interest rates late last year, the improvement in affordability would have been even better," he added.
Garrett told The Australian that he expects the affordability improvements to be short lived. Continued low interest rates mean house prices are likely to keep rising this year, though at a more sustainable pace.
The largest improvements in affordability were in Sydney (+8.9%), Perth (+4.9%), and Darwin (+4.4%). In Melbourne, affordability improved +2.0%. Affordability worsened in Brisbane (-2.1%) and Canberra (-0.3%).
The HIA is Australia's leading representative of the residential building industry. The affordability index is calculated by examining house prices, mortgage rates and wages growth to determine the proportion of homeowners' income being spent on mortgage payments
Source: The Real Estate Conversation
13th April 2016