The dream of owning a home is returning for some of Australia's first home buyers, according to a report released this week which shows that affordability improved in the December quarter, up 5.4 per cent to its highest level in over a year.
The HIA/Commonwealth Bank Affordability Report shows that our incomes grew slightly and house prices fell in most areas.
HIA's Executive Director of Housing and Economics, Simon Tennent, said that according to Commonwealth Bank figures, prices fell by 3.4 per cent in capital cities and were basically flat in regional Australia with only a small fall of 0.6 per cent.
"This easing in house prices at a time when interest rates are on hold and incomes are creeping up has lowered the affordability hurdle for some home buyers, but there is still a long way to go", Mr. Tennent said.
"For all of Australia, the median first-home buyer price eased by 4.2 per cent to $327,400 in the December quarter, with typical first-home repayments falling from $1,986 to $1,902", he said.
"It is highly likely that the worst of the affordability crisis has passed as the favourable combination of stable interest rates, higher incomes and soft house prices will most likely continue throughout 2006", he said.
The HIA/Commonwealth Bank Affordability Report uses Commonwealth Bank house price data to measure the ratio of average household disposable income to the qualifying income required to meet payments on a typical dwelling.
The table below tracks changes in housing affordability in Australia since 2003.
Source: Housing Industry of Australia
|
Housing Affordability Index, Australia | |||||||||
|
|
|
|
|
|
Average Annual Household Income |
Qualifying Annual Income |
| ||
|
|
|
Median First Home Price |
Interest Rate |
Monthly Payment |
Total |
Disposable |
Total |
Disposable |
Housing Affordability Index |
|
|
Quarter |
$ |
% |
$ |
$ |
$ |
$ |
$ |
$ |
|
2003 |
Dec |
337,500 |
7.05 |
1,917 |
74,900 |
67,700 |
76,700 |
69,300 |
97.7 |
|
|
Mar |
323,400 |
7.05 |
1,837 |
75,900 |
68,300 |
73,500 |
66,100 |
103.3 |
|
|
Jun |
330,500 |
7.05 |
1,877 |
77,100 |
71,000 |
75,100 |
69,200 |
102.6 |
|
2004 |
Sep |
316,900 |
7.05 |
1,800 |
78,600 |
71,000 |
72,000 |
65,000 |
109.2 |
|
|
Dec |
328,700 |
7.05 |
1,867 |
78,900 |
71,100 |
74,700 |
67,300 |
105.6 |
|
|
Mar |
334,100 |
7.30 |
1,941 |
80,000 |
71,400 |
77,600 |
69,300 |
103.0 |
|
|
Jun |
337,000 |
7.30 |
1,957 |
80,800 |
72,100 |
78,300 |
69,900 |
103.1 |
|
2005 |
Sep |
341,900 |
7.30 |
1,986 |
81,700 |
72,800 |
79,400 |
70,800 |
102.8 |
|
|
Dec |
327,400 |
7.30 |
1,902 |
82,500 |
73,400 |
76,100 |
67,700 |
108.4 |
