An easing of mortgage lending rates alongside subdued house prices were the main drivers of continued improvement in housing affordability, according to a new report.
The HIA-CBA Housing Affordability Index inched up by 1.2 per cent in the March 2013 quarter to a level of 69.7. This result is 12.8 per cent higher than twelve months earlier.
HIA Senior Economist Shane Garrett remarked that the improvement was mainly in the capital cities.
“Overall, the trend across the capital cities is one of continued improvement in affordability, with the capital city index increasing by 2.0 per cent in the March 2013 quarter”, Mr Garrett said.
Affordability improved during the March quarter of 2013 in Brisbane (up by 6.2 per cent), Melbourne (4.7 per cent), Canberra (2.6 per cent) and Sydney (1.2 per cent) but dropped in Adelaide (down 4.1 per cent), Hobart (3.8 per cent) and Perth (2.6 per cent)
Outside of the capital cities, affordability deteriorated in regional South Australia (down 3.8 per cent), regional Victoria (1.2 per cent) and regional Queensland (0.7 per cent), but improved in regional Tasmania (up by 2.8 per cent) and regional New South Wales (up 0.3 per cent).
“Some of these developments notwithstanding, the overall trend of improvement continued into 2013, and we can expect further improvements over coming quarters as the latest RBA rate cut flows through to households”, Mr Garrett concluded.