Cheaper housing starting to stir buying activity

Cheaper housing starting to stir buying activity

Posted on Tuesday, November 27 2012 at 3:56 PM

Cheaper buying opportunities have arisen for investors as housing affordability continued to improve in the September 2012 quarter across Australia, according to the Housing Industry Association (HIA).

The HIA-CBA (Commonwealth Bank of Australia) Housing
Affordability Index reports a housing affordability jump of 5.3 per cent in the
September quarter compared to the previous quarter, and a 15 per cent surge
when comparing the September quarter to the same quarter 12 months ago.

HIA chief
economist Harley Dale says the September quarter is the seventh consecutive
quarter that the headline affordability index has seen improvement.

“The run of
consecutive improvements in some regional indices is even longer, in some
instances showing affordability has reached levels not seen since the early
2000s,” Dale says.

Steadily growing
incomes, falling interest rates and easing dwelling prices are the drivers of
the nation’s improvement in housing affordability, he says.

“At the same
time, however, transactions volumes have remained historically low as economic
uncertainty has weighed heavily on households’ willingness to engage in the
residential property market.”

But with signs
of a housing transaction recovery under way, Dale says a December interest rate
cut would only accelerate this.

“An increase in
homebuyer action can occur without generating undue inflationary pressure and
would assist a much needed recovery in new residential construction activity.”

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