Housing Affordability Improves In First Quarter

Housing affordability across Australia experienced improvement during the first three months of 2016,
according to the latest Affordability Report from the Housing Industry Association.

According to the HIA Affordability Report released today, affordability improved by 2.7 per cent during
the December 2015 quarter and was 0.4 per cent more favourable than the same period a year earlier.
Aggregate capital city housing affordability was 4.1 per cent more favourable during the quarter, while
regional markets experienced 0.1 per cent improvement.

“The national median dwelling price fell during the March 2016 quarter and this was the main factor
behind the improvement in affordability during the first quarter of the year,” said HIA Senior
Economist, Shane Garrett.

“Had it not been for the shock increase in variable mortgage interest rates late last year, the
improvement in affordability would have been even better,” Mr Garrett said.

“Earnings growth has been held back by slack in the economy, and this situation has also worked
against improving affordability.

“At the end of the day, the most durable way of improving affordability lies in facilitating the supply of
affordable new housing more effectively. Planning delays, land supply shortages and the heavy tax
burden are all making the achievement of housing affordability much more difficult.

During the March 2016 quarter, the largest improvements in affordability were in Sydney (+8.9 per cent),
Perth (+4.9 per cent) and Darwin (+4.4 per cent). Affordability also saw improvement in Hobart (+2.9 per
cent) and Melbourne (+2.0 per cent). Affordability worsened in Brisbane (-1.2 per cent), Adelaide (-0.2
per cent), and Canberra (-0.3 per cent) during the March 2016 quarter.