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Housing affordability has deteriorated for the second consecutive quarter, according to the latest Housing Industry Association-CBA First Home Buyer Affordability Report.
According to the report, affordability slipped 3.3 per cent in the September quarter, but was still 35.7 per cent ahead of the same time last year.
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HIA senior economist Ben Phillips said that the demand for homes had picked up during the quarter in a climate of record low interest rates, the first home buyers boost, and improving news on domestic and global economic prospects.
“Housing remains more affordable in 2009 than it was through most of the rest of the decade. However, the outlook for affordability is not a good one. Interest rates are on the way up, the first home buyers boost is being wound back, and progress in reducing the structural barriers to increasing new housing supply is slow,” Mr Phillips said.
“If we don’t succeed in significantly lifting the level of new home building over the next few years then there is a very real risk that we will return to the woeful affordability levels of 2007 and 2008.
“The necessary boost to the economy provided by a strengthening housing construction sector is under threat from increased regulation, a slow and increasingly restricted building approvals process, and the same debilitating problems related to land supply, new home taxation, and skilled labour shortages that afflicted the industry last cycle.”
