The ever-increasing home values and the growing costs of borrowing have generated a housing affordability decline by more than 30 per cent over the past year.
According to the latest HIA-CBA Housing Affordability Report, affordability declined by 9.1 per cent in the June quarter across all Australian capital cities and 6.7 per cent in regional areas.
The index in question calculates home affordability by combining interest rates, household incomes and home prices . The results came in 32% down on same time last year.
“As housing affordability slips away, so too does the chance for many Australians to realise their dream of owning a home,” HIA chief economist Harley Dale commented yesterday.
It is imperative that the Federal Government makes this issue a priority.
“There has been a marked lack of commitment and attention in the current federal election campaign given to the significant hurdles prospective First Home Buyers face. Helping Australians afford a roof over their head is surely a fundamental responsibility of government,” Harley Dale added.
According to the HIA-CBA Index, the largest drops in housing affordability were recorded in Sydney (-9.1 per cent), Regional Victoria (-9.0 per cent), Regional Tasmania (-8.8 per cent), and Adelaide (-8.7 per cent). “Key federal policy priorities need to include a program to reduce new housing costs such as inequitable taxes and charges, better planning approvals systems, and a dedicated federal housing and development ministry to coordinate policy across all sectors and levels of government,” Mr Dale said. The systems currently in place are slow and cumbersome. They do no encourage further development and the creation of additional housing at affordable prices.
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