Login
iscover
Housing affordability in Australia continued to decline in the June 2017 quarter, largely due to the significant negative influence made by Sydney. The NSW capital's affordability record has declined past the critical level — now at -0.7 per cent — HIA's Affordability Index shows.
The index reported that NSW, at -2.2 per cent, had the most significant negative influence on the overall national affordability decline.
It found a 9.1 per cent rise in the median dwelling price to a new high-water mark of $540,200.
HIA said the growth in house prices in the quarter outstripped the growth in wages, which led to the deterioration in affordability.
As a consequence of these factors, the affordability index for Australia dropped by 0.3 per cent in the June 2017 quarter.
“Acquiring and servicing a mortgage on a house in Sydney now requires more than two standard Sydney incomes," HIA said. "Sydney is the only market to have achieved this outcome in the 15-year history of this report.”
The index also found that affordability in Melbourne improved marginally in the quarter, but remains 6.0 per cent less affordable than this time last year.
On the positive side, affordability improved in six of the eight capital cities.
The largest improvement occurred in Darwin (+4.3 per cent), followed by Adelaide (+2.9 per cent), Hobart (+1.6 per cent), Brisbane (+1.0 per cent), Canberra (+0.8 per cent) and Melbourne (+0.8 per cent).
Of the capitals where affordability worsened, the biggest deterioration was in Perth (-1.3 per cent) and Sydney (-0.7 per cent).
The Perth deterioration in affordability appears to contradict the soft conditions in that market, but the fall in average wages in Perth in the quarter outweighed the positive impact on affordability from the falls in home prices.
The HIA Affordability Index is produced quarterly and uses a range of data — including wages, house prices and borrowing costs — to provide an indication of the affordability of housing. A higher index result signifies a more favourable affordability outcome.
Newsletter
