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ISCOVER
Staff Reporter
The Reserve Bank of Australia’s (RBA’s) spate of rate cuts in 2012 helped to drive housing affordability over the December 2012 quarter, new data have revealed.
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The HIA-CBA Housing Affordability Index increased by 5.5 per cent in the December 2012 quarter, representing an 18.4 per cent advance on the same period of 2011.
“This is the eighth consecutive quarter of increase in the index, bringing it close to levels not seen since the depths of the GFC during 2009,” HIA senior economist Shane Garrett said.
“For regional areas, affordability is at levels last seen during the early 2000s decade. Affordability is on the increase in every part of the country.
“This has been driven by the weakness of price developments as well as the two cash rate reductions effected by the RBA in the final quarter. Continued growth in earnings has also served to make housing more affordable”.
Mr Garrett said it is worth noting that affordability would have been further improved had Australia’s lenders decided to pass on the RBA’s rate cuts in full.
“Despite the relative attractiveness of house purchase implied by these figures, transactions activity on the ground is very sluggish. This underlines the need for stronger interventions from the RBA in terms of interest rates and from the government with regard to the heavy taxation of home purchase,” Mr Garrett said.
