Housing affordability has improved in Perth, Sydney — but not everywhere

DESPITE what your mortgage balance may tell you, housing affordability is at its best levels in 12 years — and has improved in Perth.

DESPITE what your bank balance may tell you, new data has revealed housing affordability is at its best levels in 12 years.

According to the latest HIA-CBA Housing Affordability Index during the March quarter nationally affordability was at its most favourable level in 12 years.

Perth and Sydney are the two cities where housing affordability improved.

It attributes this to interest rates remaining low and a slow down in price growth at the same time that earning are growing.

HIA Senior Economist, Shane Garrett says housing affordability is now 10.8 per cent more favourable than a year ago.

The picture isn’t as positive on a capital city basis with affordability down in Brisbane, Hobart and Adelaide.

It remains unchanged in Melbourne but improved in Sydney and Perth.

Mr Garrett says while in some capital cities increases in home prices during the past year had been significant, but other factors meant the market was still considered affordable.

“The impact of lower interest rates and continued earnings growth has ensured that home purchase affordability has improved over the past year for existing homeowners and those on the cusp of entering the market in the short term,’’ he says.

The report found that affordability of new houses continued to be “somewhat less favourable” than existing houses.

According to the HIA there is a recovery underway in the amount of activity in the new home market.

It predicts 180,000 new dwellings will be built this year — up 8.2 per cent on last year.