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Australian housing at its most affordable since 1999

HIA’s Housing Affordability Index for the June Quarter 2020 indicates national property prices are at their most affordable since 1999.

HIA’s Affordability Index is calculated for each of the eight capital cities and regional areas on a quarterly basis and takes into account the latest dwelling prices, mortgage interest rates, and wage developments.

Housing affordability improved in the June quarter across all capital cities.

“This improvement in affordability means that it now requires less than 1.2 average incomes to service a mortgage on a median-priced dwelling in Australia’s capitals,” explains Tim Reardon, HIA’s chief economist.

Three years ago it took over 1.4 average incomes to service the same mortgage.

“The combination of lower interest rates, slow house price growth and relatively steady wage growth over the past three years have driven this improvement in affordability,” Mr Reardon said.

Affordability isn’t the main concern of the average first-home buyer, however.

“The challenge facing first home buyers is no longer their ability to repay a loan, but in obtaining a mortgage in the first place,” Mr Reardon said.

“A decade of red tape has made it significantly harder for first home buyers to obtain a mortgage for purchasing their first home. A raft of restrictions … has seen the number of home loans issued with a 10 per cent deposit fall from 21 per cent of all loans to just 7 per cent.”

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