Australian housing affordability conditions deteriorated in the second quarter on the back of a rise in prices paid for established dwellings, according to a private-sector report.
The Housing Industry Association-Commonwealth Bank of Australia's first home buyer affordability index fell 5.3% to 152.5 in the June quarter from 161.0 in the first quarter but was 41% higher than the previous corresponding period.
The report found the average monthly loan repayment for a first-home mortgage rose 7.6% to $1,983. The decline in affordability comes on the back of a return to growth in house prices following two straight quarters of moderating prices.HIA Chief Economist Harley Dale said demand for new homes has increased ahead of new housing supply coming online, putting pressure on existing dwelling prices.
"The lift in established house prices stands in marked contrast to the predictions of a house price rout - but we have neither boom nor bust conditions," said Harley Dale.
"A step-down in the First Home Owner Grant Boost and a lengthening pipeline of new housing supply will help to keep established house prices in check while low interest rates will keep affordability close to seven year highs through the second half of 2009."