Blog: Housing affordability sees 4.4 per cent increase in June quarter
It could be a great time for home buyers to make their move, with recent figures from the Housing Industry Association (HIA) indicating that housing affordability has seen an increase during the June quarter of this year.
The HIA-Commonwealth Bank Housing Affordability Index rose by 4.4 per cent during the quarter, to reach a total level of 72.8 (the higher the reading, the more affordable the average Australian dwelling is).
The index is released on a quarterly basis and covers every state and territory in Australia, excluding the Northern Territory. It is calculated by assessing the level of average full time wages necessary to be able to meet repayments on a "median priced dwelling".
According to HIA Chief Economist Dr Harley Dale, the June quarter increase means the index is now 16.7 per cent higher compared to mid-2012.
"A synchronised increase across the capital cities and non-metro areas drove the further improvement in the June 2013 quarter," Dr Dale said in an August 28 statement.
"These are certainly encouraging results for those entering the market at this time in the cycle."
On August 6, the Reserve Bank of Australia (RBA) announced that they would be lowering the cash rate again by 25 basis points, with the result that the cash rate now sits at 2.5 per cent.
This decision followed a series of similar reductions throughout this year, and Dr Dale says this has had a significant effect on housing affordability by "offsetting recent dwelling price increases".
During the June quarter, the HIA-Commonwealth Bank Housing Affordability Index saw increases in all seven capital cities covered by the report. Brisbane had the strongest rise in affordability with an increase of 10.4 per cent.
This was followed by Hobart (10 per cent), Adelaide (7.7 per cent), Canberra (4.1 per cent), Perth (4.1 per cent), Sydney (3.3 per cent) and Melbourne (2.2 per cent).