Housing Affordability Nosedives in Melbourne
HIA Victorian Executive Director, Gil King, said 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 2008 levels when interest rates were significantly higher,” he said.
“Australia’s burgeoning population is pushing new dwelling requirements to record high levels,” Mr Kind 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.”
Affordability deteriorated in all capital cities and regional areas in the December quarter. The largest falls were recorded in Sydney, Brisbane, Hobart and Canberra.
Melbourne’s slim affordability advantage over Australia’s large capitals remains intact. Regional Victoria’s affordability has been aided by the State Government’s generous first home buyer boost for regional Victoria and is more affordable than all regions on the mainland.
The affordability index compares average incomes with typical mortgage repayments for first home buyers, the higher the index the more affordable housing is.
