Australian home affordability takes a nose dive

Housing affordability fell dramatically at the end of 2009, it has been revealed.

A survey conducted by the Housing Industry Association (HIA) and the Commonwealth Bank of Australia found affordability fell by 18.4 per cent in the December quarter and was 22.3 per cent lower than a year earlier.

Ben Phillips, a senior economist at the HIA, said that before the December quarter, first homebuyers had a small window of opportunity for entering a more favourable marketplace.

"The window is now closing with affordability retreating to 2008 levels when interest rates were significantly higher," he added.

Such findings may affect the decision of Aussies who decide to compare home loans in search of the best financing options. Earlier this month, the Herald Sun reported that a range of smaller lenders are set to take on the major banks in the home loan market this year.

According to the HIA/Commonwealth survey, the largest falls in housing affordability were in capital cities and regional areas, with the steepest declines recorded in Sydney, Brisbane and Canberra.

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