Housing affordability the best in five years; 39% rise in December quarter
Housing affordability the best in five years; 39% rise in December quarter
By Terry Ryder
Multiple interest rates cuts and the boost to the First Home Owners Grant have pushed housing affordability conditions to their best levels in five years.
The latest HIA-CBA First Home Buyer Affordability Index reveals a 39.2% increase in the affordability measure in the December quarter. The Index leapt from 110.3 in the September quarter to 153.6 in the December quarter, the most affordable level since March 2003.
Over the last three months of 2008, the average home loan repayment fell by 26% to $2,056 per month, significantly lower than the previous amount of $2,796.
Further reductions in mortgage interest rates this year are expected to yield another improvement in housing affordability in the next report. Official interest rates are now four percentage points lower than August 2008.
"Conditions have improved significantly for first-home buyers and clearly many Australians are taking up the opportunity to get into home ownership," says HIA's chief executive - policy Chris Lamont.
HIA economic modelling based on the Australian Bureau of Statistics' Survey of Income and Housing 2005/06 confirms that 135,000 households on mortgages have come out of mortgage stress since December 2008.
"Previously a household would have to be earning in the order of $85,000 per year to afford a modestly priced home without going into severe mortgage stress," says Lamont. "The improvement in housing affordability means those on a more modest income can now consider a home of their own."
The HIA-CBA First Home Buyer Affordability Report showed that affordability improved over the December quarter in all capital cities and regional areas, with the largest improvements being for Perth, Brisbane, and Regional Western Australia.
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This article was written by Terry Ryder & is taken from the News Items page of the Hotspotting website
http://www.hotspotting.com.au. We highly recommend this website for people interested in real estate.
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