Released yesterday, the latest Affordability Report from the Housing Industry Association (HIA) shows housing affordability declined 3.7% at a national level over the June quarter and conditions were 2.1% less favourable to buyers when compared to the same period 12 months ago.
HIA economist Geordan Murray said the decline over the June quarter saw affordability levels move back to where they were at the end of 2015.
“Home price growth moderated in the early part of the year and the HIA Housing Affordability Index showed an improvement in affordability during the March 2016 quarter,” Murray said.
“However, in the June quarter dwelling price growth returned and the index reverted to the level we saw at the end of 2015,” he said.
The national decline in affordability was driven by conditions in capital city markets, where affordability fell 4.3% in the three months to June.
Regional markets saw affordability improve by 1.9%.
“While there was a decline in the headline index tracking the national picture, there was substantial variation around the country – with substantial differences between states, and also differences between capital city markets and regional markets,” Murray said.
“The geographic variation in affordability is most evident in the comparison between Melbourne and Perth. Over the last year, the median dwelling price in Perth has fallen by 4.7% while Melbourne’s has grown by 11.5%. This has seen the affordability index for Perth increase by 6.2% over the last year, while the index for Melbourne has fallen by 6.2%.”
Murray said the difference in conditions between Perth and Melbourne come down to the two cities’ economies as Perth continues its post-mining boom struggles while Melbourne benefits from strong job and population growth.
During the June 2016 quarter, affordability worsened in five capital cities; (-7.4%), Canberra (-5.7%), Sydney (-1.6%), Adelaide (-1.3%) and Brisbane (-1.0%).
Affordability improved over the quarter in Perth (+3.2%), Darwin (+2.9%) and Hobart (+2.2%).