Housing Affordability Improves Modestly
JUNE QUARTER 2011
Housing Affordability Improves Modestly The HIA-Commonwealth Bank Housing Affordability Index posted a second consecutive quarterly improvement to be up by 0.8 per cent (0.4 points) in the June 2011 quarter. The Index was 7.2 per cent (3.8 points) higher compared to the June 2010 quarter.
At the national level, the recent trend of a declining median dwelling price was reversed with a slight 0.8 per cent rise experienced over the June quarter. Needless to say dwelling price performance varied across geographies.
Counterintuitively the chaotic dynamics of the global economy in the June quarter conspired to improve housing affordability. The instability resulting from the European debt crisis and the US debt ceiling debacle provided grounds for the RBA board to leave the cash rate unchanged, when they might otherwise have (mistakenly) hiked rates. At the same time, conditions in wholesale funding markets improved for Australian banks as they became an increasingly attractive proposition relative to their US and European counterparts. This flowed through to lower mortgage rates for home buyers, albeit by only a few basis points.
• A slight decline in the mortgage lending rate and relatively strong income growth improved affordability.
Average weekly ordinary time earnings (AWOTE) increased by 1.2 per cent during the quarter to be 4.4 per cent higher year on year.
• Monthly mortgage repayments remained at an elevated level in the June 2011 quarter, holding above the $3,000 mark.
HIGHLIGHTS
• The headline HIA-CBA Affordability Index increased by 0.8 per cent in the June 2011 quarter and was 7.2 per cent higher than in the corresponding period one year earlier. • This outcome took affordability to its highest point since the March 2010 quarter. • Melbourne retained the unenviable title of home to the nation’s least affordable housing.
HOUSING AFFORDABILITY INDEX, AUSTRALIA Source: HIA-Commonwealth Bank Affordability Report 75 70 65 60 55 50 45 40 35 30
S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 TOTAL
CAPITALS
OTHER
HIA-Commonwealth Bank Affordability Report – June Qtr 11
Housing Affordability Index, Australia
%pa
Monthly Mortgage Repayment $
Average Weekly Earnings* $
5.12% 5.15% 5.68% 6.08% 6.67% 6.75% 7.02% 7.12% 7.08%
2,226 2,349 2,681 2,817 3,102 3,006 3,069 3,008 3,021
61,823 62,587 63,830 64,615 65,057 65,442 66,342 67,080 67,891
Median Dwelling Price
Interest Rate
$ 418,200 439,800 476,600 481,900 502,700 483,400 481,600 467,800 471,400
Jun Qtr 09 Sep Qtr 09 Dec Qtr 09 Mar Qtr 10 Jun Qtr 10 Sep Qtr 10 Dec Qtr 10 Mar Qtr 11 Jun Qtr 11
Qualifying Income
Affordability Multiple
Affordability Index
1.5 1.6 1.7 1.8 2.0 1.9 1.9 1.8 1.8
69.4 66.6 59.5 57.4 52.4 54.4 54.0 55.8 56.2
$ 89,038 93,946 107,249 112,661 124,085 120,235 122,760 120,320 120,847
* Annualised
New South Wales
Victoria
Over the June quarter the HIA-CBA Housing Affordability Index showed a 2.0 per cent (1.0 point) improvement in affordability in Sydney and a 3.0 per cent (1.6 points) improvement in the rest of NSW. Year on year, the Index shows affordability in Sydney improved by 4.4 per cent (2.2 points), and the rest of NSW improved by 8.2 per cent (4.1 points).
A moderate decline in the median dwelling price was observed in Victoria with a decline of 0.4 per cent in both Melbourne and the rest of the state.
Affordability in NSW, outside of Sydney, continues to be very low with only the two largest capital cities registering lower affordability. The median dwelling price in Sydney fell by 1.0 per cent over the June 2011 quarter while the rest of the state posted a decline of 2.0 per cent, offsetting the price growth observed in the March quarter. The AWOTE in NSW grew by 0.65 per cent over the quarter, below the 1.2 per cent growth nationally. HOUSING AFFORDABILITY INDEX, NSW
Source: HIA-Commonwealth Bank Affordability Report 75.0
The Affordability Index shows that affordability improved over the June quarter in both Melbourne and the rest of the state by 1.9 per cent (1.0 point) and 2.0 per cent (1.1 points), respectively. Despite the improvement, Melbourne remained the least affordable place in the country to purchase a home during the June quarter. Outside of Melbourne, Victoria’s housing remains considerably more affordable than the capital and largely unchanged when compared with a year earlier. HOUSING AFFORDABILITY INDEX, VIC
70.0 65.0 60.0 55.0 50.0 45.0 40.0 35.0 30.0 J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 SYDNEY
The AWOTE in Victoria posted growth of 1.2 per cent in the most recent quarter which follows on from the 0.4 per cent decline observed last quarter. This provides for year on year growth of 2.5 per cent which is well below the growth of 4.4 per cent in AWOTE nationally.
REST OF NSW
Source: HIA-Commonwealth Bank Affordability Report 80 75 70 65 60 55 50 45 40 35 30 J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 MELBOURNE
REST OF VIC
Page 2
HIA-Commonwealth Bank Affordability Report – June Qtr 11
Queensland
Western Australia
The median dwelling price for both Brisbane and the rest of Queensland defied recent trends to record price growth of 4.5 per cent and 1.7 per cent, respectively, during the June 2011 quarter. Despite the strong growth over the quarter, the median dwelling price for Brisbane and the rest of Queensland remains, respectively, 4.8 per cent and 4.7 per cent below their levels in the June quarter of 2010.
Growth in AWOTE in WA slowed from the lofty 3.2 per cent pace observed in the previous quarter although it still posted respectable growth of 1.2 per cent in the June quarter. Year on year growth in AWOTE shows a remarkable 8.1 per cent growth which is resounding confirmation of the labour market pressures in the state.
The growth in Queensland’s AWOTE of 1.4 per cent over the most recent quarter contributed to relatively strong growth of 4.3 per cent over the year which is on par with growth nationally. A decline in mortgage interest rates, robust growth in income and a softer housing market should be a recipe for improved affordability in Queensland. However, the significant jump in the median dwelling price during the June quarter has prevented any such improvement. The Affordability Index for Brisbane declined by 2.7 per cent (1.6 points) in the June quarter although it remains 5.4 per cent (3.0 points) higher than a year earlier. There was no change in the Affordability Index measuring the rest of Queensland during the June quarter although it remains 5.4 per cent (2.8 points) higher than a year earlier.
Strong growth in incomes and a further decline in the median dwelling price contributed to further improvements in housing affordability. The Affordability Index shows that affordability in Perth improved by 3.2 per cent (1.8 points) over the quarter to be 15.6 per cent (8.1 points) higher than a year earlier. The rest of WA posted a 2.5 per cent (1.5 points) improvement over the June quarter and 12.6 per cent (7.1 points) over the year. HOUSING AFFORDABILITY INDEX, WA Source: HIA-Commonwealth Bank Affordability Report 70 65 60 55 50 45 40 35 30
HOUSING AFFORDABILITY INDEX, QLD
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11
Source: HIA-Commonwealth Bank Affordability Report
PERTH
75 70
REST OF WA
Tasmania
65 60 55 50 45 40 35 30
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 BRISBANE
REST OF QLD
South Australia The Affordability Index suggests a slight improvement in affordability in Adelaide, up by 0.2 per cent (0.1 point), and a slight deterioration in affordability in the rest of South Australia with a decline of 0.4 per cent (0.3 points). The slightly lower mortgage rates and a 1.1 per cent rise in AWOTE contributed to this outcome for Adelaide. The 1.2 per cent rise in Adelaide’s median dwelling price over the quarter acted to restrain the improvement in the Affordability Index. Meanwhile, the 1.8 per cent rise in median dwelling price outside Adelaide offset the positive effect of lower interest rates and higher incomes and left affordability in a slightly poorer position than in the March quarter. HOUSING AFFORDABILITY INDEX, SA
Tasmania maintained its position as home to the nation’s most affordable housing. The Affordability Index shows affordability in Hobart improved by 1.5 per cent (1.0 point) during the June 2011 quarter although there was a deterioration in affordability outside the capital with the index falling by 3.0 per cent (2.2 points) to its lowest level since March 2008. The deterioration of affordability outside of Hobart stems from a jump in the median dwelling price of 4.7 per cent in the June 2011 quarter. The median dwelling price in Hobart remains unchanged at $365,500 when compared with the June 2010 quarter. HOUSING AFFORDABILITY INDEX, TAS
Source: HIA-Commonwealth Bank Affordability Report 100 90 80 70 60 50 40 30
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 HOBART
REST OF TASMANIA
Australian Capital Territory
Source: HIA-Commonwealth Bank Affordability Report 80 75
Growth in the ACT’s median dwelling price slowed to 0.7 per cent in the June 2011 quarter. Price growth acted to partially offset the positives delivered to affordability through the lower mortgage interest rate and robust income growth.
70 65 60 55 50 45 40 35 30
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 ADELAIDE
Thanks to the large proportion of the ACT’s workforce employed in the public sector, income growth has continued to tick along at a slow but steady pace. The latest quarter provided an increase in
REST OF SA
Page 3
HIA-Commonwealth Bank Affordability Report – June Qtr 11 AWOTE of 1.4 per cent to be 3.0 per cent higher than during the corresponding time a year earlier.
Dwelling Price Movement (% change in median price)
The Affordability Index for the ACT showed a 1.0 per cent (0.6 point) improvement in affordability during the June 2011 quarter. The Affordability Index has declined 11.1 per cent (7.0 points) over the last year which is by far the worst of any jurisdiction.
June Qtr '10 to June Qtr '11 Capital City -3.9% -4.6% -4.8% -10.0% -7.2% 1.5% 11.6%
NSW VIC QLD WA SA TAS ACT*
HOUSING AFFORDABILITY INDEX, ACT
Source: HIA-Commonwealth Bank Affordability Report 75 70 65 60 55 50 45 40 35 30
NSW VIC QLD WA SA TAS
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 ACT
Dwelling Prices The dwelling prices used in this publication are medians of those financed by the Commonwealth Bank. As such they cannot and do not take account of changes in the mix of size, location and quality of dwellings financed. Quarter-to-quarter variations therefore reflect any changes in the composition of housing financed, as well as changes in the price of a dwelling of a given size, location, and quality.
Rest of State -7.3% -2.0% -4.7% -7.6% -1.4% 2.4% N/A
March Qtr '11 to June Qtr '11 -1.0% -2.0% -0.4% -0.4% 4.5% 1.7% -1.5% -0.9% 1.2% 1.8% 0.0% 4.7%
ACT*
0.7%
N/A
*The dwelling price for ACT was corrected for an outlying value in original data.
Housing Affordability Index by Region NSW Rest of Sydney State
VIC Melb
Rest of State
QLD Rest of Bris State
WA
SA Rest of State
Perth
Adel
Rest of State
TAS Rest of Hobart State
ACT All
Mar Qtr 10
55.9
52.2
54.1
61.9
60.5
56.2
55.2
60.1
61.6
58.9
74.5
76.9
61.0
Jun Qtr 10
50.5
49.4
50.0
57.0
55.1
52.7
51.7
56.7
55.8
57.7
70.7
70.7
63.2
Sep Qtr 10
51.5
50.5
50.8
56.3
58.1
54.5
54.9
59.9
59.5
58.0
71.8
74.3
57.9
Dec Qtr 10
50.3
52.0
50.0
57.7
58.8
55.6
54.7
58.5
59.2
59.6
67.0
71.5
55.9
Mar Qtr 11
51.7
51.9
50.7
56.3
59.7
55.5
58.0
62.3
60.3
59.1
69.8
72.5
55.5
Jun Qtr 11
52.7
53.5
51.7
57.4
58.1
55.5
59.8
63.8
60.4
58.8
70.9
70.3
56.1
Affordability Multiple* NSW Rest of Sydney State
VIC Melb
Rest of State
QLD Rest of Bris State
WA
SA
Perth
Rest of State
Adel
Rest of State
TAS Rest of Hobart State
ACT All
Mar Qtr 10
1.8
2.0
1.9
1.7
1.7
1.8
1.9
1.7
1.7
1.7
1.4
1.3
1.7
Jun Qtr 10
2.0
2.1
2.1
1.8
1.9
1.9
2.0
1.8
1.8
1.8
1.5
1.5
1.6
Sep Qtr 10
2.0
2.0
2.0
1.8
1.8
1.9
1.9
1.7
1.7
1.8
1.4
1.4
1.8
Dec Qtr 10
2.0
2.0
2.1
1.8
1.8
1.8
1.9
1.8
1.7
1.7
1.5
1.4
1.8
Mar Qtr 11
2.0
2.0
2.0
1.8
1.7
1.9
1.8
1.7
1.7
1.7
1.5
1.4
1.9
Jun Qtr 11
1.9
1.9
2.0
1.8
1.8
1.9
1.7
1.6
1.7
1.8
1.5
1.5
1.8
Required Loan Repayments by Region ($ per month) NSW Rest of Sydney State
VIC
QLD Rest of Bris State
WA
SA
TAS Rest of Hobart State
ACT
Melb
Rest of State
Perth
Rest of State
Adel
Rest of State
$
$
$
$
$
$
$
$
$
$
$
$
$
Mar Qtr 10
3,442
2,315
3,087
2,123
3,076
2,459
3,306
2,568
2,537
2,110
2,046
1,663
3,093
All
Jun Qtr 10
3,831
2,458
3,376
2,331
3,377
2,627
3,558
2,742
2,797
2,149
2,209
1,854
3,002
Sep Qtr 10
3,769
2,419
3,334
2,370
3,232
2,560
3,398
2,633
2,645
2,160
2,194
1,782
3,282
Dec Qtr 10
3,888
2,358
3,437
2,343
3,261
2,564
3,482
2,753
2,700
2,132
2,385
1,875
3,417
Mar Qtr 11
3,875
2,422
3,370
2,391
3,207
2,564
3,388
2,665
2,673
2,168
2,337
1,889
3,469
Jun Qtr 11
3,824
2,366
3,346
2,373
3,341
2,600
3,325
2,633
2,696
2,201
2,330
1,971
3,481
* Number of average full time adult wages required to affordably service a mortgage on median priced dwelling.
NOTE: HIA Economics have implemented a number of modifications to the HIA-Commonwealth Bank Housing Affordability Index to enable more accurate evaluation of housing affordability in Australia. As a result of the amended methods the Index has been rebased, therefore values in this report are not directly comparable with earlier editions. Further information about the index methodology can be obtained from the HIA Economics website at economics.hia.com.au.
Page 4
Housing Affordability Improves Modestly The HIA-Commonwealth Bank Housing Affordability Index posted a second consecutive quarterly improvement to be up by 0.8 per cent (0.4 points) in the June 2011 quarter. The Index was 7.2 per cent (3.8 points) higher compared to the June 2010 quarter.
At the national level, the recent trend of a declining median dwelling price was reversed with a slight 0.8 per cent rise experienced over the June quarter. Needless to say dwelling price performance varied across geographies.
Counterintuitively the chaotic dynamics of the global economy in the June quarter conspired to improve housing affordability. The instability resulting from the European debt crisis and the US debt ceiling debacle provided grounds for the RBA board to leave the cash rate unchanged, when they might otherwise have (mistakenly) hiked rates. At the same time, conditions in wholesale funding markets improved for Australian banks as they became an increasingly attractive proposition relative to their US and European counterparts. This flowed through to lower mortgage rates for home buyers, albeit by only a few basis points.
• A slight decline in the mortgage lending rate and relatively strong income growth improved affordability.
Average weekly ordinary time earnings (AWOTE) increased by 1.2 per cent during the quarter to be 4.4 per cent higher year on year.
• Monthly mortgage repayments remained at an elevated level in the June 2011 quarter, holding above the $3,000 mark.
HIGHLIGHTS
• The headline HIA-CBA Affordability Index increased by 0.8 per cent in the June 2011 quarter and was 7.2 per cent higher than in the corresponding period one year earlier. • This outcome took affordability to its highest point since the March 2010 quarter. • Melbourne retained the unenviable title of home to the nation’s least affordable housing.
HOUSING AFFORDABILITY INDEX, AUSTRALIA Source: HIA-Commonwealth Bank Affordability Report 75 70 65 60 55 50 45 40 35 30
S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 TOTAL
CAPITALS
OTHER
HIA-Commonwealth Bank Affordability Report – June Qtr 11
Housing Affordability Index, Australia
%pa
Monthly Mortgage Repayment $
Average Weekly Earnings* $
5.12% 5.15% 5.68% 6.08% 6.67% 6.75% 7.02% 7.12% 7.08%
2,226 2,349 2,681 2,817 3,102 3,006 3,069 3,008 3,021
61,823 62,587 63,830 64,615 65,057 65,442 66,342 67,080 67,891
Median Dwelling Price
Interest Rate
$ 418,200 439,800 476,600 481,900 502,700 483,400 481,600 467,800 471,400
Jun Qtr 09 Sep Qtr 09 Dec Qtr 09 Mar Qtr 10 Jun Qtr 10 Sep Qtr 10 Dec Qtr 10 Mar Qtr 11 Jun Qtr 11
Qualifying Income
Affordability Multiple
Affordability Index
1.5 1.6 1.7 1.8 2.0 1.9 1.9 1.8 1.8
69.4 66.6 59.5 57.4 52.4 54.4 54.0 55.8 56.2
$ 89,038 93,946 107,249 112,661 124,085 120,235 122,760 120,320 120,847
* Annualised
New South Wales
Victoria
Over the June quarter the HIA-CBA Housing Affordability Index showed a 2.0 per cent (1.0 point) improvement in affordability in Sydney and a 3.0 per cent (1.6 points) improvement in the rest of NSW. Year on year, the Index shows affordability in Sydney improved by 4.4 per cent (2.2 points), and the rest of NSW improved by 8.2 per cent (4.1 points).
A moderate decline in the median dwelling price was observed in Victoria with a decline of 0.4 per cent in both Melbourne and the rest of the state.
Affordability in NSW, outside of Sydney, continues to be very low with only the two largest capital cities registering lower affordability. The median dwelling price in Sydney fell by 1.0 per cent over the June 2011 quarter while the rest of the state posted a decline of 2.0 per cent, offsetting the price growth observed in the March quarter. The AWOTE in NSW grew by 0.65 per cent over the quarter, below the 1.2 per cent growth nationally. HOUSING AFFORDABILITY INDEX, NSW
Source: HIA-Commonwealth Bank Affordability Report 75.0
The Affordability Index shows that affordability improved over the June quarter in both Melbourne and the rest of the state by 1.9 per cent (1.0 point) and 2.0 per cent (1.1 points), respectively. Despite the improvement, Melbourne remained the least affordable place in the country to purchase a home during the June quarter. Outside of Melbourne, Victoria’s housing remains considerably more affordable than the capital and largely unchanged when compared with a year earlier. HOUSING AFFORDABILITY INDEX, VIC
70.0 65.0 60.0 55.0 50.0 45.0 40.0 35.0 30.0 J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 SYDNEY
The AWOTE in Victoria posted growth of 1.2 per cent in the most recent quarter which follows on from the 0.4 per cent decline observed last quarter. This provides for year on year growth of 2.5 per cent which is well below the growth of 4.4 per cent in AWOTE nationally.
REST OF NSW
Source: HIA-Commonwealth Bank Affordability Report 80 75 70 65 60 55 50 45 40 35 30 J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 MELBOURNE
REST OF VIC
Page 2
HIA-Commonwealth Bank Affordability Report – June Qtr 11
Queensland
Western Australia
The median dwelling price for both Brisbane and the rest of Queensland defied recent trends to record price growth of 4.5 per cent and 1.7 per cent, respectively, during the June 2011 quarter. Despite the strong growth over the quarter, the median dwelling price for Brisbane and the rest of Queensland remains, respectively, 4.8 per cent and 4.7 per cent below their levels in the June quarter of 2010.
Growth in AWOTE in WA slowed from the lofty 3.2 per cent pace observed in the previous quarter although it still posted respectable growth of 1.2 per cent in the June quarter. Year on year growth in AWOTE shows a remarkable 8.1 per cent growth which is resounding confirmation of the labour market pressures in the state.
The growth in Queensland’s AWOTE of 1.4 per cent over the most recent quarter contributed to relatively strong growth of 4.3 per cent over the year which is on par with growth nationally. A decline in mortgage interest rates, robust growth in income and a softer housing market should be a recipe for improved affordability in Queensland. However, the significant jump in the median dwelling price during the June quarter has prevented any such improvement. The Affordability Index for Brisbane declined by 2.7 per cent (1.6 points) in the June quarter although it remains 5.4 per cent (3.0 points) higher than a year earlier. There was no change in the Affordability Index measuring the rest of Queensland during the June quarter although it remains 5.4 per cent (2.8 points) higher than a year earlier.
Strong growth in incomes and a further decline in the median dwelling price contributed to further improvements in housing affordability. The Affordability Index shows that affordability in Perth improved by 3.2 per cent (1.8 points) over the quarter to be 15.6 per cent (8.1 points) higher than a year earlier. The rest of WA posted a 2.5 per cent (1.5 points) improvement over the June quarter and 12.6 per cent (7.1 points) over the year. HOUSING AFFORDABILITY INDEX, WA Source: HIA-Commonwealth Bank Affordability Report 70 65 60 55 50 45 40 35 30
HOUSING AFFORDABILITY INDEX, QLD
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11
Source: HIA-Commonwealth Bank Affordability Report
PERTH
75 70
REST OF WA
Tasmania
65 60 55 50 45 40 35 30
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 BRISBANE
REST OF QLD
South Australia The Affordability Index suggests a slight improvement in affordability in Adelaide, up by 0.2 per cent (0.1 point), and a slight deterioration in affordability in the rest of South Australia with a decline of 0.4 per cent (0.3 points). The slightly lower mortgage rates and a 1.1 per cent rise in AWOTE contributed to this outcome for Adelaide. The 1.2 per cent rise in Adelaide’s median dwelling price over the quarter acted to restrain the improvement in the Affordability Index. Meanwhile, the 1.8 per cent rise in median dwelling price outside Adelaide offset the positive effect of lower interest rates and higher incomes and left affordability in a slightly poorer position than in the March quarter. HOUSING AFFORDABILITY INDEX, SA
Tasmania maintained its position as home to the nation’s most affordable housing. The Affordability Index shows affordability in Hobart improved by 1.5 per cent (1.0 point) during the June 2011 quarter although there was a deterioration in affordability outside the capital with the index falling by 3.0 per cent (2.2 points) to its lowest level since March 2008. The deterioration of affordability outside of Hobart stems from a jump in the median dwelling price of 4.7 per cent in the June 2011 quarter. The median dwelling price in Hobart remains unchanged at $365,500 when compared with the June 2010 quarter. HOUSING AFFORDABILITY INDEX, TAS
Source: HIA-Commonwealth Bank Affordability Report 100 90 80 70 60 50 40 30
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 HOBART
REST OF TASMANIA
Australian Capital Territory
Source: HIA-Commonwealth Bank Affordability Report 80 75
Growth in the ACT’s median dwelling price slowed to 0.7 per cent in the June 2011 quarter. Price growth acted to partially offset the positives delivered to affordability through the lower mortgage interest rate and robust income growth.
70 65 60 55 50 45 40 35 30
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 ADELAIDE
Thanks to the large proportion of the ACT’s workforce employed in the public sector, income growth has continued to tick along at a slow but steady pace. The latest quarter provided an increase in
REST OF SA
Page 3
HIA-Commonwealth Bank Affordability Report – June Qtr 11 AWOTE of 1.4 per cent to be 3.0 per cent higher than during the corresponding time a year earlier.
Dwelling Price Movement (% change in median price)
The Affordability Index for the ACT showed a 1.0 per cent (0.6 point) improvement in affordability during the June 2011 quarter. The Affordability Index has declined 11.1 per cent (7.0 points) over the last year which is by far the worst of any jurisdiction.
June Qtr '10 to June Qtr '11 Capital City -3.9% -4.6% -4.8% -10.0% -7.2% 1.5% 11.6%
NSW VIC QLD WA SA TAS ACT*
HOUSING AFFORDABILITY INDEX, ACT
Source: HIA-Commonwealth Bank Affordability Report 75 70 65 60 55 50 45 40 35 30
NSW VIC QLD WA SA TAS
J06 S06 D06 M07 J07 S07 D07 M08 J08 S08 D08 M09 J09 S09 D09 M10 J10 S10 D10 M11 J11 ACT
Dwelling Prices The dwelling prices used in this publication are medians of those financed by the Commonwealth Bank. As such they cannot and do not take account of changes in the mix of size, location and quality of dwellings financed. Quarter-to-quarter variations therefore reflect any changes in the composition of housing financed, as well as changes in the price of a dwelling of a given size, location, and quality.
Rest of State -7.3% -2.0% -4.7% -7.6% -1.4% 2.4% N/A
March Qtr '11 to June Qtr '11 -1.0% -2.0% -0.4% -0.4% 4.5% 1.7% -1.5% -0.9% 1.2% 1.8% 0.0% 4.7%
ACT*
0.7%
N/A
*The dwelling price for ACT was corrected for an outlying value in original data.
Housing Affordability Index by Region NSW Rest of Sydney State
VIC Melb
Rest of State
QLD Rest of Bris State
WA
SA Rest of State
Perth
Adel
Rest of State
TAS Rest of Hobart State
ACT All
Mar Qtr 10
55.9
52.2
54.1
61.9
60.5
56.2
55.2
60.1
61.6
58.9
74.5
76.9
61.0
Jun Qtr 10
50.5
49.4
50.0
57.0
55.1
52.7
51.7
56.7
55.8
57.7
70.7
70.7
63.2
Sep Qtr 10
51.5
50.5
50.8
56.3
58.1
54.5
54.9
59.9
59.5
58.0
71.8
74.3
57.9
Dec Qtr 10
50.3
52.0
50.0
57.7
58.8
55.6
54.7
58.5
59.2
59.6
67.0
71.5
55.9
Mar Qtr 11
51.7
51.9
50.7
56.3
59.7
55.5
58.0
62.3
60.3
59.1
69.8
72.5
55.5
Jun Qtr 11
52.7
53.5
51.7
57.4
58.1
55.5
59.8
63.8
60.4
58.8
70.9
70.3
56.1
Affordability Multiple* NSW Rest of Sydney State
VIC Melb
Rest of State
QLD Rest of Bris State
WA
SA
Perth
Rest of State
Adel
Rest of State
TAS Rest of Hobart State
ACT All
Mar Qtr 10
1.8
2.0
1.9
1.7
1.7
1.8
1.9
1.7
1.7
1.7
1.4
1.3
1.7
Jun Qtr 10
2.0
2.1
2.1
1.8
1.9
1.9
2.0
1.8
1.8
1.8
1.5
1.5
1.6
Sep Qtr 10
2.0
2.0
2.0
1.8
1.8
1.9
1.9
1.7
1.7
1.8
1.4
1.4
1.8
Dec Qtr 10
2.0
2.0
2.1
1.8
1.8
1.8
1.9
1.8
1.7
1.7
1.5
1.4
1.8
Mar Qtr 11
2.0
2.0
2.0
1.8
1.7
1.9
1.8
1.7
1.7
1.7
1.5
1.4
1.9
Jun Qtr 11
1.9
1.9
2.0
1.8
1.8
1.9
1.7
1.6
1.7
1.8
1.5
1.5
1.8
Required Loan Repayments by Region ($ per month) NSW Rest of Sydney State
VIC
QLD Rest of Bris State
WA
SA
TAS Rest of Hobart State
ACT
Melb
Rest of State
Perth
Rest of State
Adel
Rest of State
$
$
$
$
$
$
$
$
$
$
$
$
$
Mar Qtr 10
3,442
2,315
3,087
2,123
3,076
2,459
3,306
2,568
2,537
2,110
2,046
1,663
3,093
All
Jun Qtr 10
3,831
2,458
3,376
2,331
3,377
2,627
3,558
2,742
2,797
2,149
2,209
1,854
3,002
Sep Qtr 10
3,769
2,419
3,334
2,370
3,232
2,560
3,398
2,633
2,645
2,160
2,194
1,782
3,282
Dec Qtr 10
3,888
2,358
3,437
2,343
3,261
2,564
3,482
2,753
2,700
2,132
2,385
1,875
3,417
Mar Qtr 11
3,875
2,422
3,370
2,391
3,207
2,564
3,388
2,665
2,673
2,168
2,337
1,889
3,469
Jun Qtr 11
3,824
2,366
3,346
2,373
3,341
2,600
3,325
2,633
2,696
2,201
2,330
1,971
3,481
* Number of average full time adult wages required to affordably service a mortgage on median priced dwelling.
NOTE: HIA Economics have implemented a number of modifications to the HIA-Commonwealth Bank Housing Affordability Index to enable more accurate evaluation of housing affordability in Australia. As a result of the amended methods the Index has been rebased, therefore values in this report are not directly comparable with earlier editions. Further information about the index methodology can be obtained from the HIA Economics website at economics.hia.com.au.
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