Perth, Brisbane, Sydney most affordable

Embargoed until Sunday, February 7, 11:59 pm

The latest Australian Institute for Progress Housing Affordability Index shows that average housing repayment affordability in the September quarter 2020 (the latest ABS data release) improved to be the best it has been since January 2016, and it was the easiest it has been to save a deposit since Q1 2016..

The repayment index[1] was 118.7, an improvement of 1.4 points and the deposit index 157.2, an improvement of 1.8.

AIP Executive Director Graham Young said that the great barrier to housing affordability was still the time it took to save a deposit.

“There were also differences between capital cities with the individual state figures telling a more nuanced story.

“Affordability increased in the three capital cities most affected by COVID – Melbourne, Sydney and Hobart – while it decreased for those least affected by it – Brisbane, Perth, Canberra and Adelaide.

“This was mostly a function of movements in house prices and part of the mechanism would have been internal migration which flowed out of New South Wales and Victoria and into Queensland, Western Australia and South Australia.

“This is from high COVID states to low COVID states.”

Mr Young said that on an historical basis the most affordable state was Perth, followed by Brisbane and Sydney. Hobart was the least affordable followed by Canberra, Melbourne and Adelaide.

He also said that there was no evidence that the federal government's HomeBuilder grant had inflated house prices.

"There was a fall of $6,522 in the median Australian house price with drops in Sydney and Melbourne of $21,000 and $20,000 respectively,a fall of $9,700 in Hobart, and modest rises of $5,000 in each of Adelaide and Brisbane. The only significant increases were Perth ($15,000 but with the cheapest absolute median house price) and Canberra ($26,500).

To download the report click here.

For further information contact Graham Young 0411 104 801.

[1] The index was constructed so as to average 100 during the period 1994 to 2004 which is used as the baseline reference point. It relates capital costs to real rates of interest and average incomes.