Housing affordability up From: AAP January 12, 2006
HOUSING affordability for first home buyers has reached its highest level in more than a year, and house prices are expected to stay weak for the next 12 months.
A report from the Housing Industry Association (HIA) found housing affordability rose 5.4 per cent in the December quarter, its highest level in more than a year. Australia's peak building industry body said the improvement was driven by steady interest rates in the three months to December last year as house prices fell across most of the country.
HIA executive director Simon Tennent said the figures showed prices fell 3.4 per cent in capital cities and by a modest 0.6 per cent in regional areas.
"The easing in house prices at a time when interest rates are on hold and incomes are creeping up has lowered the affordability hurdle for some home buyers," Mr Tennent said.
"But there is still a long way to go."
Mr Tennent said the median house price for first-home buyers eased by 4.2 per cent to $327,400 in the quarter.
Typical first home repayments fell to $1902 each month, from $1986.
"It is highly likely that the worst of the affordability crisis has passed as the favourable combination of stable interest rates, higher incomes and soft house prices will mostly continue throughout 2006," he said.
The report is put together using house price data from the Commonwealth Bank. It measures the ratio of average household disposable income against the income needed to meet repayments on a typical house.
