Home loans: Housing more affordable, but not for long, says expert

Monday 26 October 2009

Article by Mozo

A new report has highlighted the fact that housing may be more affordable now, but it may not be for long, in news that may be of interest to home loans customers.

Compiled by the HIA Economics Group and Commonwealth Bank, the First Home Buyer Affordability Report showed property affordability has declined for the second consecutive quarter.

According to the study, the figure dropped by 3.3 per cent in this year’s September quarter.

However, it was still at a level 35.7 per cent ahead of the same period the previous year, which may be good news for people hoping to take out home loans.

HIA senior economist Ben Phillips noted an increase in demand for houses throughout the period – something he attributed to low interest rates and the governmental first-time buyer assistance, as well as a general improvement in the economic outlook.

Mr Phillips said: "Housing remains more affordable in 2009 than it was through the rest of the decade.

"However, the outlook for affordability is not a good one. Interest rates are on the way up, the first-time buyer’s boost is being wound back and progress in reducing the structural barriers to increasing new housing supply is low."

In related news, the Westpac-Melbourne Institute Index of Consumer Sentiment recently showed that there has been a fall in the number of people considering buying a new house.

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