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Housing affordability improves in Sydney
Released 26 August 2011



Housing in Sydney in now 2.0% more affordable, according to a report from the Housing Industry Association (HIA).    

The HIA-Commonwealth Bank Housing Affordability Index saw a national improvement of 0.8 per cent in the June 2011 quarter. Outside of the capital cities, affordability improved in the non-metropolitan regions of New South Wales by 3.0 per cent.

HIA Senior Economist Andrew Harvey said earnings growth and a small decrease in mortgage lending rates worked to improve housing affordability over the June 2011 quarter.

“These factors more than offset a small increase in the median house price,” he said.

Global economic uncertainty played a key role in the increase in affordability with the Reserve Bank of Australia (RBA) making the decision to keep rates on hold during the quarter.

The improved conditions for Australian banks in wholesale lending markets facilitated a slight lowering of mortgage lending rates and average weekly ordinary time earnings posted respectable growth of 1.2 per cent in the quarter, equivalent to an annualised rate of 4.8 per cent.

“Improved affordability is good news for home buyers. If we look through the GFC period which was skewed by unprecedented cuts to interest rates, we have not seen affordability reach its current level since 2006. With new home building activity moderating and some easing in pressure on skilled trades, now is a particularly good time to consider building a new home,” Harvey said.