HIA December quarter affordability report shows sharp deterioration
The Housing Industry Association (HIA) released data on Tuesday regarding changes in dwelling prices for the December quarter and the related impact on housing affordability.
HIA Senior Economist, Shane Garrett said, “During the December 2016 quarter, housing affordability across Australia worsened by some 7.3% due to the recent uplift in dwelling prices”.
However, he did note that Perth experienced a further improvement in affordability with today’s report showing how home purchase remains particularly accessible in markets such as Tasmania, as well as regional areas of South Australia, Western Australia and parts of the Northern Territory.
Garrett pointed to the sluggish pace of earnings growth in the economy as a key impediment to better affordability, indicating that disposable income isn’t keeping up with the appreciation in house prices.
Looking across the various states the most significant declines in affordability were experienced in Melbourne (-11.6%), Canberra (-10.7%) and Sydney (-7.3%). Based on HIA data, Hobart is the most affordable city, while Perth is the second most affordable capital, followed by Adelaide.
The following data demonstrates affordability trends over the last five years.