Housing affordability best in 12 years thanks to low interest rates, says index
Despite surging house prices, housing affordability has risen to its most favourable level in 12 years in the first quarter of this year, thanks to record low interest rates, a survey has found.
The HIA-CBA Housing Affordability Index improved by 2.1 per cent in the March quarter and chalked up a 10.8 per cent annual rise.
The index measures a wide range of factors of which house prices are only one. The other major factors are interest rates and incomes.
"....... the impact of lower interest rates and continued earnings growth has ensured that home purchase affordability has improved over the past year for existing homeowners and those on the cusp of entering the market in the short term," said HIA economist Shane Garrett.
"We're talking about house purchase here, and at the moment it's easier to purchase."
In calculating the index, only the major costs of ownership are considered, namely the house price and monthly mortgage payments.
The Sydney Morning Herald
May 28, 2014 - 2:42PM