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Housing affordability has continued to improve, rising 1.2 per cent in the first three months of this year.
According to the latest HIA-CBA Housing Affordability Index, housing affordability is now 12.8 per cent greater than 12 months earlier.
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"The improvements to affordability in this update, however, were not universal," HIA senior economist Shane Garrett.
"Housing affordability across regional Australia deteriorated mildly in the March quarter of this year, due largely to dwelling price increases which offset the effects of reduced lending rates.
"Overall, the trend across the capital cities is one of continued improvement in affordability, with the capital city index increasing by 2.0 per cent in the March 2013 quarter. However, the cities of Adelaide, Perth and Hobart each saw declines in affordability.
"Some of these developments notwithstanding, the overall trend of improvement continued into 2013, and we can expect further improvements over coming quarters as the latest RBA rate cut flows through to households.
"However, much of the recent improvement in affordability is the result of the weaknesses that affect the economy. The structural issues which dramatically push up the cost of new housing, including high taxes and regulatory costs, remain outstanding and in urgent need of reform. Policy makers should be cognisant of this situation and act to reduce the unacceptably large gap between new and existing property prices."
Reductions in affordability occurred in Adelaide, which recorded a 4.1 per cent drop and Hobart, which recorded a 3.8 per cent fall.
