Home buying in Australia became more affordable in the three months to September, a report released by the Housing Industry Association and Commonwealth Bank of Australia said Thursday.
The HIA/CBA First Home Buyer Affordability Index improved by 3% in the September quarter, as housing prices eased 1.9%, offsetting a net increase in the borrowing costs over the quarter. The index, however, remained at near record lows at a level 1.1% below that of same quarter last year.
The reading on the index improved to 109.1 in the September quarter from 105.3 in the June quarter, but was lower than the 119 recorded in the September quarter of 2007.
During the quarter ended September, average home loan repayment declined 1.5%, without taking into account recent reductions in mortgage interest rates, and which are expected to further boost the affordability index in the December quarter.
The monthly loan repayment needed on a typical first-home mortgage declined to A$2785 from A$2828 in the previous quarter. The mortgage repayments accounted for 27.5% of total first home buyer income, which was lower than the previous quarter, but the fourth highest proportion on record.
Chris Lamont, Chief Executive of the HIA said "First home buyer affordability has been languishing at or near record lows for a long time now, but aggressive interest rate cuts and the additions to the first home owners grant, particularly for new housing, provide some welcome relief."
Lamont indicated that the tripling in the First Home Owners Grant for new dwellings would also boost confidence and the ability of aspiring buyers to break into the housing market.
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