Sydney’s housing affordability tanked in the December 2009 quarter dropping by 22.3 per cent, to be 28.6 per cent lower than a year ago.
Affordability in Regional NSW was down by 17.7 per cent over the quarter and 24.6 per cent over the year.
“Sydney remains the most unaffordable city in Australia,” said HIA NSW Excutive Director Graham Wolfe.
“Prior to the December quarter, first home buyers had a small window of favourable affordability conditions to enter the market. That window is now closing with affordability retreating to early 2008 levels when interest rates were significantly higher,” he said.
“Australia’s fast growing population is pushing new dwelling requirements to record high levels. HIA research shows NSW will need to build more than 40,000 homes every year to cater for an expected population of 10.5 million by 2050,” Mr Wolfe said.
“Without the required new home building to keep up with underlying requirements, house prices and rents are expected to continue pushing upwards through 2010,” he said.
Affordability deteriorated in all capital cities and regional areas in the December quarter. The largest falls were recorded in Sydney, Brisbane, Hobart and Canberra.
The affordability index compares average incomes with typical mortgage repayments for first home buyers, the higher the index the more affordable housing is.