Yet according to a report issued just yesterday, over the March 2014 quarter housing is at its most affordable in 12 years.
Firmly setting the cat among the pigeons, the latest HIA-CBA Housing Affordability Index states that record low interest rates have helped drive improvements in affordability.
Housing Industry Association senior economist Shane Garrett said the index improved by 2.1% during the first quarter of 2014 – which meant affordability was now 10.8% more favourable than a year ago.
While there have been significant increases in house prices over the past year, the impact of lower interest rates and continued earnings growth meant affordability was now better than it has been since March 2002, Garrett said.
“The RBA has signalled that interest rates are set to remain low for some time. As house price pressures ease off, we expect home owner affordability to remain reasonably favourable for the foreseeable future.”
Garrett added that the challenge of ensuring adequate and affordable housing would exist well beyond this cyclical improvement in affordability.
“Australia requires a concerted policy focus on boosting new housing supply. That needs to be a key policy priority for all levels of government.”
Michael Yardney, from Metropole Property Strategists, said many would disagree with the index results and would point out it was hard for first home buyers to get into the property market.
“But there’s nothing new about that. It’s always been hard to get your first footing onto the property ladder and it always will be.”
He said other studies also showed that prevailing low interest rates, wages growth and a slowing pace in house price growth have kept housing affordable for many.
However, some commentators – like Residex founder John Edwards – have been outspoken in their views on the growing unaffordability of property.
