Housing market entry gets harder
By
Ben Abbott
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19/08/2010 5:40:00 AM
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Melbourne is becoming 'almost as unaffordable as Sydney' according to the latest HIA-CBA Housing Affordability Report, which shows interest rates and rapid house price growth are pushing housing out of reach.
The report showed Melbourne’s affordability dropped by 6.7% in the June 2010 quarter and was down by 39.8% when compared with the same quarter a year ago. Meanwhile, Victorian regional affordability fell by 9% during the quarter, to a level that sees affordability come off 32% since the June 2009 quarter.
However, the largest falls in affordability came in Sydney, where affordability dropped by 9.1%, while prospective homebuyers in Adelaide also suffered a hit, after an 8.7% drop. Regional Tasmania was also high on the list of difficult locations for new buyers, after affordability decreased by 8.8%.
The combination saw a national decrease of 9.5% in affordability over the June 2010 quarter in the nation's capital cities, and a 6.7 decrease in regional Australia, a decline that has fast been labelled a crisis by housing pundits, as affordability problems become worse than in 2007.
Commenting on Victoria's situation, HIA Victorian executive director Gil King said as housing affordability "slips away", so too does the "chance for many Victorians to realise their dream of owning a home".
“Unless as a nation we are willing to accept that home ownership is no longer a fundamental tenet of our society worth fighting for, then substantial Federal Government engagement in addressing plummeting housing affordability is required,” King said.
The affordability index combines interest rates, household incomes, and home prices to determine affordability conditions.
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