FOR IMMEDIATE RELEASE
21 March 2013
Housing Affordability Continues to Surge Housing affordability surged again in the December 2012 quarter, driven by earnings growth, interest rate cuts and weak price developments, said the Housing Industry Association, the voice of Australia’s residential building industry. The HIA-CBA Housing Affordability Index increased by 5.5 per cent in the December 2012 quarter, representing an 18.4 per cent advance on the same period of 2011. “This is the eighth consecutive quarter of increase in the index, bringing it close to levels not seen since the depths of the GFC during 2009,” said HIA Senior Economist, Shane Garrett. “For regional areas, affordability is at levels last seen during the early 2000’s decade. Affordability is on the increase in every part of the country,” added Shane Garrett. “This has been driven by the weakness of price developments as well as the two cash rate reductions effected by the RBA in the final quarter. Continued growth in earnings has also served to make housing more affordable”. “It is worth noting that affordability would be even more favourable to householders had recent RBA rate cuts been passed on fully be lenders,” commented HIA Senior Economist Shane Garrett. “Despite the relative attractiveness of house purchase implied by these figures, transactions activity on the ground is very sluggish. This underlines the need for stronger interventions from the RBA in terms of interest rates and from the government with regard to the heavy taxation of home purchase”. 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. (Note: Northern Territory is not included in the analysis)
HOUSING AFFORDABILITY INDEX, AUSTRALIA Source: HIA-Commonwealth Bank Affordability Report
80.0 75.0 70.0 65.0 60.0 55.0 50.0 45.0 40.0 35.0 30.0
D07 M08
J08
S08
D08 M09
J09
S09 TOTAL
D09 M10
J10
S10
CAPITALS
D10 M11
J11
S11
D11 M12
J12
S12
D12
OTHER
For further Information contact: Shane Garrett, Senior Economist on 0416 633 261 For copies of the publication please contact: Kirsten Lewis on k.lewis@hia.com.au or 02 6245 1393