Housing affordability index shows fastest improvement in six years

By Duffie Osental | 21 May 2019

Housing affordability has significantly improved across Australia, according to the latest report from the Housing Industry Association (HIA).

Data from the HIA Affordability Index showed that affordability rose nationally by 2.2% in the March 2019 quarter, representing the fastest improvement in affordability since 2013. HIA’s Affordability Index is calculated for each of Australia’s eight capital cities and regional areas on a quarterly basis. It takes into account the latest dwelling prices, mortgage interest rates, and wage developments.

“The improvement in housing affordability has been experienced across the country, with the exception only of Tasmania and the ACT, where ongoing house price growth has seen affordability remain static,” said Tim Reardon, chief economist at HIA. “The boom in home building of the past five years is a key factor behind the improvement in housing affordability. With completions of new homes remaining at elevated levels, affordability is poised to continue to improve.

Reardon also pointed out that continued wage growth has contributed significantly to the improvement in affordability, with rising incomes in Sydney and Melbourne leaving a particularly lasting impact.

“Affordability in Sydney deteriorated to an extent that in June 2017 it required two average Sydney incomes to be able to afford repayments on an average Sydney home,” said Reardon. “[But] in just over a year this has improved to only requiring 1.8 standard incomes to purchase the same home. Similarly, in Melbourne the Affordability Index has improved by almost 10% in a year.”

Five of the eight capital cities saw improved affordability over the year to March 2019. Sydney continued record the greatest improvements, with its index up by 12.4%. This was followed by Melbourne (up 9.6%), Perth (up 7.7%), Darwin (up 5.9%), and Brisbane (up 2.5%). On the other hand, affordability deteriorated in Hobart (down 5.1%), Canberra (down 5.1%), and Adelaide (down 1.1%).

Top Suburbs : mt gravatt , coorparoo , artarmon , mt colah , wiley park


Get help with your investment property

Do you need help finding the right loan for your investment?

When investing in property, it is important to make sure that you not only have the lowest available rate that you can get, but also have the correct loan features for your needs.

Just fill in a few details below and we'll then arrange for a local mortgage broker to contact you and work out what features or types of loans are right for your needs. We'll even help with the paperwork. Plus an appointment is free.

How soon would you like a mortgage?
What is your Annual Household Income i $
Do you currently own any Investment Properties?
Do you own your own residence?
How much equity do you have in all your current properties?
First Name
Last Name
Where do you live?
What number can we reach you on?
E-mail address
We value your privacy and treat all your information seriously - you can check out our privacy policy here