HIA Affordability Index by Market

Brisbane was the only capital city or region that saw affordability improve in the December 2022 Quarter, with the HIA Affordability Index increasing by 0.4 per cent. Hobart saw a decline, but a relatively modest one, of 0.8 per cent.

In the middle of the pack, markets saw affordability decline by between 1.5 per cent and 2.6 per cent in the December 2022 Quarter. These markets included Sydney and regional New South Wales, Melbourne and regional Victoria, regional Queensland, and Canberra.

The markets that saw the worst deterioration in affordability in the December 2022 Quarter were in Western Australia, South Australia, the Northern Territory and Tasmania. Perth, Adelaide and Darwin all saw declines of between 4.5 per cent and 4.8 per cent. Regional Northern Territory and regional Tasmania saw declines of 4.2 per cent and 4.4 per cent, respectively. While regional Western Australia and regional South Australia saw declines of 6.6 per cent and 7.2 per cent, respectively.

Despite having among the biggest declines in affordability most recently, Perth and Darwin remain the most affordable capital cities in Australia, following the price declines of their respective mining downturns. Though neither are considered ‘affordable’ any more, with both falling below the ‘100’ threshold for the HIA Affordability Index, meaning more than one average income is now required in both cities to service the mortgage on a median priced dwelling. This is the first time since 2016 and 2017 respectively that Perth and Darwin have been ‘unaffordable’.

Adelaide, also seeing a significant decline in affordability in the latest quarter, is now the third least affordable capital city in Australia, recently overtaking both Brisbane and Canberra. This follows significant price gains during the pandemic for Adelaide, making the city much less affordable than it has averaged over the last 20 years.

Hobart has also seen significant price gains and deteriorating affordability over the pandemic but remains the third most affordable capital city in Australia.

Sydney remains the least affordable capital city in Australia, requiring more than two average incomes to service the mortgage on a median priced dwelling. This is distantly followed by Melbourne and Adelaide, closely ranked together as second and third least affordable of the capitals.

Homeowners: HIA Affordability Index, Decmber 2022 quarter

FIRST HOME BUYERS: YEARS WAIT TO SAVE FOR A DEPOSIT, AUSTRALIA

First Homebuyers: Wait time in years to save for a deposit on typical home, December 2022 quarter