RTTNews - Housing affordability conditions in Australia dipped in the second quarter, mainly due to an increase in prices paid for established houses, a report by the Housing Industry Association and the Commonwealth Bank of Australia said Thursday. This follows the sharp recovery seen from mid 2008.
Housing affordability slipped more than 5% in the June quarter, but was higher than in the corresponding period last year. Demand for houses picked up ahead of the supply, putting pressure on established house prices, Harley Dale, chief economist with the HIA noted. At the same time, the housing finance figures are signaling an increase in new home construction in the second half of the year, the HIA added.
Dale said, The lift in established house prices stands in marked contrast to the predictions of a house price rout. But we have neither boom nor bust conditions.
The economist pointed out that a step down in the First Home Owner Grant Boost and a lengthening pipeline of new housing supply would help to keep established house prices in check, while low interest rates would keep affordability close to seven year highs through the second half of the year.
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