Current at: 23 October 2008
The HIA-CBA First Home Buyer Affordability Index improved by 3 per cent in the September 2008 quarter with a 1.9 per cent easing in house prices offsetting a net increase in borrowing costs over the quarter. The index nevertheless remained at near record lows at a level 1.1 per cent below that of the September 2007 quarter.
Over the September 2008 quarter the average home loan repayment fell by 1.5 per cent to $2,785 per month. The result does not take into account the recent reductions in mortgage interest rates. These are expected to provide a further improvement in housing affordability in the next report.
HIA Chief Executive – Policy, Mr Chris Lamont, said that the new interest rate cycle will provide over the next few months some reasons to be cautiously optimistic about an improvement in housing affordability.
“First home buyer affordability has been languishing at or near record lows for a long time now, but aggressive interest rate cuts and the additions to the first home owners grant, particularly for new housing, provide some welcome relief,” said Chris Lamont.
“The recently announced tripling of the First Home Owners Grant for new dwellings will also be a boost to confidence and to the ability of aspiring buyers to break into the housing market,” said Chris Lamont.
HIA is calling for local and state governments to ensure that administrative bottlenecks in processing applications for new residential development are avoided so as to ensure that all new aspiring first home buyers will have the opportunity to take up the federal government’s initiative.
The HIA-CBA First Home Buyer Affordability Report showed that affordability improved over the September quarter in Sydney, Melbourne, Adelaide, Hobart, Regional Queensland, Regional South Australia, and Regional Tasmania.
