Housing affordability has worsened for the second straight quarter amid rising property prices and could be returning to its “woeful” levels of 2007 and 2008, a survey says.
The Housing Industry Association-Commonwealth Bank of Australia first home buyer affordability report found housing affordability fell 3.3 per cent in the September quarter.
HIA senior economist Ben Phillips said the outlook for affordability was poor.
“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 in a statement on Thursday.
“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.”
Despite deterioration, housing affordability was 35.7 per cent above where it was a year ago.
The report used Commonwealth Bank house price data to measure the ratio of average household disposable income to the qualifying income required to meet mortgage repayments on a typical dwelling.