18/05/2010 - 10:55

Housing affordability slumps in WA

18/05/2010 - 10:55

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Regional Western Australia has recorded one of the largest declines in housing affordability in the March quarter, a new report shows.

Housing affordability slumps in WA

Regional Western Australia has recorded one of the largest declines in housing affordability in the March quarter, a new report shows.

The Housing Industry Association-Commonwealth Bank home buyer affordability report released today showed that affordability in regional WA fell 14.2 per cent in the three months to the end of March.

It was the second largest fall in the country, beaten only by regional Victoria where housing affordability slumped 15.9 per cent.

Regional New South Wales was third with a decline of 12 per cent.

In metropolitan Perth, housing affordability dropped 6.6 per cent in the March quarter.

Nationally, housing affordability fell by an average 4 per cent to be 28.7 per cent lower than 12 months ago.

Separately, affordability dropped 4.2 per cent in capital cities and 5.3 per cent in regional areas, to be lower by 30.5 per cent and 24.8 per cent respectively compared to March 2009.

HIA senior economist Ben Phillips said that further interest rate rises in April and May is likely to see affordability in the June quarter crash to record lows similar to that seen in 2007 when interest rate were above 9 per cent.

"With the Reserve Bank insistent on further rate rises, housing affordability will once again be a key issue in the mortgage belt regions of Australia," Mr Phillips said.

"We are yet to see the required level of co-operation between all levels of government to deliver critical housing infrastructure without hitting new home buyers.

"Higher interest rates, exorbitant infrastructure charges, an overly restrictive and time consuming planning system continue to fuel Australia's affordability crisis. Overcoming these issues will go a long way towards restoring housing affordability in Australia."

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

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