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Staff Reporter
Housing affordability has shown further signs of improvement, giving the Reserve Bank less reason to cut the official cash rate next month.
The latest HIA-CBA Housing Affordability Index increased by 5.3 per cent in the September 2012 quarter to be up by 15 per cent compared to the same quarter in 2011.
"This is the seventh consecutive quarter where we have seen an improvement in the headline affordability index," HIA chief economist Harley Dale said.
"The run of consecutive improvements in some regional indices is even longer, in some instances showing affordability has reached levels not seen since the early 2000s."
“Housing affordability has been improving on the back of steadily growing incomes, falling interest rates, and easing dwelling prices.
“At the same time, however, transaction volumes have remained historically low as economic uncertainty has weighed heavily on households’ willingness to engage in the residential property market.
“Tentative signs of a recovery in transaction volumes should hopefully gather legs – another interest rate cut in early December would enhance the prospects of this occurring.
“An increase in homebuyer action can occur without generating undue inflationary pressure and would assist a much-needed recovery in new residential construction activity.”
The HIA-CBA Housing Affordability Report recorded improved affordability in all seven capital city indices, as well as improvements in the six indices tracking the non-metro regions of each state.
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