Sydney puts drag on national housing affordability
Housing affordability has fallen as property prices outpace income growth.
The Housing Industry Association (HIA) has released its Affordability Index, showing a 0.3% quarterly drop in housing affordability across Australia. The Index uses data such as wages, house prices and borrowing costs to calculate housing affordability. The HIA found the decline in affordability was driven by a 9.1% rise in median dwelling prices.
“The growth in house prices outstripped the growth in wages, resulting in the deterioration in affordability,” the HIA said.
New South Wales housing proved to be the greatest drag on affordability, the HIA found. The group said affordability in Sydney had declined “past a critical level”.
“Acquiring and servicing a mortgage on a house in Sydney now requires more than two standard Sydney incomes. Sydney is the only market to have achieved this outcome in the 15 year history of this report,” the HIA said.
While affordability in Melbourne improved modestly over the quarter, the city remained 6% less affordable than the same time last year. However, affordability improved over the quarter in six of the eight capital cities, with the largest improvements in Darwin and Adelaide.