Housing affordability dropped more than 5 per cent in the June quarter on the back of rising house prices, the Housing Industry Association-Commonwealth Bank First Housing Affordability Index has found.
The Index, released yesterday, slid to 152.5 index points in the June quarter from 161 index points during the March quarter.
The median house price rose to $419,900 for the quarter, from $386,400 in the March quarter, taking the median monthly mortgage repayment payment to $1,983 – up from $1,843.
HIA chief economist Dr Harley Dale said that while affordability had taken a tumble, it was still well ahead of the corresponding period last year thanks to a sharp recovery in house prices from mid 2008.
Mr Dale said demand for homes had picked up ahead of new housing supply, putting pressure on established house prices.
“The lift in established house prices stands in marked contrast to the predictions of a house price rout,” Mr Dale said.
“A step-down in the first home owner grant boost and a lengthening pipeline of new housing supply will help to keep established house prices in check while low interest rates will keep affordability close to seven year highs through the second half of 2009.”