Buying power increases for fourth time

by Ben Abbott28 Feb 2012

Housing has notched up its fourth consecutive quarter of increased affordability.

The HIA-Commonwealth Bank Housing Affordability Index improved by 2.2% in the December 2011 quarter, taking the index to a level 8.3% above that registered in the December 2010 quarter.

HIA senior economist Andrew Harvey said a decrease in mortgage lending rates and continued earnings growth offset a modest increase in the media dwelling price.

“As expected, the interest rate cuts in November and December of last year saw housing affordability
continue to trend in the right direction," Harvey said.

In the most recent quarter average weekly ordinary time earnings posted growth of 0.5 per cent and
mortgage lending rates were down by a sizeable 0.25 percentage points.

Meanwhile, home prices rose by 0.5 per cent in the December quarter although they were down by 1.8 per cent over the year.

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