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Housing affordability dips

With property prices rising more than wage growth, the affordability of homes is diminishing.  This doesn't seem to be stopping the activity in the First Home Buyers market, as they rush to grab their homes before they become out of reach.

The early months of 2006 have seen a small dip in affordability, due to an increase in first home buyer prices, according to a recent report.

Figures released this week in the HIA/Commonwealth Bank Affordability Report show that affordability deteriorated slightly in the March 2006 quarter, easing by 0.7 per cent, a level 5.5 per cent higher than a year earlier.

HIA's Executive Director of Housing and Economics, Simon Tennent, said that according to Commonwealth Bank figures, prices increased by 6.2 per cent in regional Australia while holding largely steady (down by a bare 0.1 per cent) in the capital cities.

"For all of Australia, the median first-home buyer price increased by 2.1 per cent to $334,200 in the March quarter this year, with typical first-home buyer monthly loan repayments rising from $1,902 to $1,941," Mr Tennent said.

"Home buyers entering the market needed to commit 18 per cent of their take home pay towards mortgage payments in the late 1990's. Currently, home buyers need to set aside 26.4 per cent of their disposable income," he said said.

- growth, housing, affordability

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