One Good Piece of Housing News
Despite a seemingly constant flow of negative news regarding the state of Australia’s housing and residential construction market, one set of numbers stands out as offering some form of cause for hope: housing affordability.
In the three months to March, the HIA Commonwealth Bank Housing Affordability Index improved by 3.7 points, or 6.4 per cent to come in at just under 65.0.
At this level, overall housing affordability in Australia is up 11 per cent when compared with the same quarter last year.
HIA Senior Economist Andrew Harvey says the latest figures are encouraging.
“In the March quarter we observed a modest increase in earnings, a modest decline in lending rates and a softening in the median dwelling price, so all factors moved in a direction which improved housing affordability,” Harvey says. “Cuts to the RBA cash rate totalling 50 basis points in late 2011 should have provided a much larger boost to affordability in the quarter, but the impact was eroded as lenders widened the margin between mortgage rates and the cash rate. After accounting for the wider margins, the average mortgage rate during the March quarter was only 13 basis points lower than in the December quarter.”...