Conditions are improving for homebuyers, according to the Housing Industry Association.
The comments came after figures released this week showed another lift in housing affordability in the December 2011 quarter, marking four straight quarters of improvement.
The HIA-Commonwealth Bank Housing Affordability Index rose by 2.2 per cent in the December 2011 quarter, an outcome that took the Index to a level 8.3 per cent above that registered in the December 2010 quarter.
HIA Senior Economist Andrew Harvey said that a decrease in mortgage lending rates and continued earnings growth more than offset a modest increase in the median dwelling price to further improve housing affordability in the December 2011 quarter.
“As expected, the interest rate cuts in November and December of last year saw housing affordability continue to trend in the right direction”, Harvey said.
“When the recent improvements in affordability are considered alongside the easier access to skilled trades as home building activity has eased, it increasingly looks like a good time to buy a new home for those financially able to do so.”
In the most recent quarter, average weekly ordinary time earnings posted growth of 0.5 per cent and mortgage lending rates were down by a sizeable 0.25 percentage points. Meanwhile, home prices rose by 0.5 per cent in the December quarter although they were down by 1.8 per cent over the year.
Housing affordability in the December 2011 quarter improved in Australia’s capital cities with the exception of Adelaide. Sydney improved by 3.5 per cent, Melbourne by 4.6 per cent, Brisbane by 7.9 per cent, Perth by 4.1 per cent, Hobart by 3.1 per cent and Canberra 6.1 per cent. Adelaide’s housing affordability declined by 3.6 per cent over the quarter.
Outside the capital cities, affordability improved in New South Wales (up by 0.5 per cent), Victoria (up 7.8 per cent), and Tasmania (0.3 per cent). Meanwhile, non-metro affordability declined in Queensland (down by 0.1 per cent), South Australia (down 2.0 per cent), and Western Australia (down 5.5 per cent).
Source: Quartile Research