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Housing affordability down slightly



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M E D IA RELEASE January 27, 1999

HOUSING AFFORDABILITY DOWN SLIGHTLY

Recovering house pfices in most capital cities caused housing affordability to dip slightly during the December quarter of 1998. But the nation’s peak building industry body HIA says overall, conditions are still very positive for home buyers.

The national Housing Affordability Index eased by less than one per cent in the December quarter of 1998, according to the latest Commonwealth Bank-HIA Housing Report - largely due to a strong recovery in established house prices.

Median Established House prices for the quarter rose most strongly in Sydney (up 7.6 per cent to $309,100) and Hobart (up 7.7 per cent to $127,700). Rises were recorded also in Melbourne (up 4.1 per cent to $179,300), Canberra (up 2.6 per cent to $165,500), Adelaide (up 1.5 per cent to $138,800) and Brisbane (up 0.5 per cent to $177,100). The only decline in prices over the quarter

occurred in Perth, down 0.8 per cent to $170,300.

The Housing Affordability Index tracks changes in the affordability of housing across Australia by comparing average household disposable income with the income required to pay off a house. An increase in the Affordability Index represents an improvement in affordability.

In the three months to December last year, housing affordability fell 0.9 per cent with rising house prices offsetting a fall in housing interest rates from 6.7 per cent to 6.5 per cent. Average household income rose by almost one per cent during the same period.

HIA Managing Director, Dr Ron Silberberg, said the very positive buying conditions were helping to maintain a high level of activity in the housing industry.

“Housing is just as affordable for the average Australian first home buyer as it was a year ago and yet people are buying into a rising market with obvious financial benefits,” Dr Silberberg said.

S vd n e v M e lbo urne B risbane P erth A delaide H obart C a n b e rra A u stra lia

M on th ly L o an re p a ym e n ts D ec Q tr 98 3,1'41 b

$969 $903 $812 $688 $641 $ 8 54 $946

% o f Disp. in co m e D e c Q tr 98 2 6 .8 % 18.4% 17.1% 15.4% 13.0% 12.2% 16.2% 17.9%

% o f D isp. in com e S e p t Q tr 98 2 5 .5 % 18.1% 17.4% 15.9% 13.2% 11.7% 16.1% 17.7%

% o f D isp. Inco m e D e c Q tr 97 25 .1% 18.8% 17.7% 15.6% 13.6% 13.9% 16.5% 17.9%

M e d ia n E sta b lish e d D w e llin g P rice S vd n e v M e lbo urne B risbane Perth A de la ide H obart C a n b e rra A u stra lia

D e c e m b e r 1998 $ 3 0 9 ,1 0 0 $ 1 7 9 ,3 0 0 $ 1 77 ,1 00 $1 70 ,3 00 $1 38 ,8 00 $ 1 27 ,7 00 $ 1 6 5 ,5 0 0 $1 8 4 ,7 0 0

S e p te m b e r 1998 $ 2 8 7 ,2 0 0 $1 7 2 ,2 0 0 $ 1 76 ,3 00 $1 71 ,6 00 $1 36 ,8 00 $ 1 18 ,6 00 $ 1 6 1 ,3 0 0 $1 7 8 ,6 0 0

D e c e m b e r 1997 $ 2 7 6 ,6 0 0 $1 7 3 ,9 0 0 $ 1 74 ,0 00 $1 63 ,6 00 $1 36 ,2 00 $1 36 ,6 00 $ 1 6 1 ,6 0 0 $ 1 76 ,4 00

Q u a rte rly % C h a n g e + 7 .6 % + 4.1% +0.5% -0.8% +1.5% +7.7% +2.6% +3.4%

A n n u a l % C h an ge + 1 1 .7 % + 3.0% +1.8% +4.1% +1.9% -6.5% + 2.4% +4.7%

FURTHER INFORMATION: Please Contact Dr Ron Silberberg on 0417 261 560, (02) 6299 3553 (AH) or Shane Goodwin on 0418 568 990

Housing Industry Association Limited acn no om 752

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