Housing has become a lot more affordable over the past year, due to a drop in home prices combined with lower home loan rates and higher incomes, according to property analysis provider RP Data.
Based on around 285,000 sales over the first 10 months of 2011, the RP Data-Rismark Home Value Index recorded a decline in the month of October prior to the Reserve Bank’s decision to cut interest rates in November 2011.
Capital city home values slid 0.5 per cent (in seasonally adjusted terms) in October. Over the 10 months to end October 2011, values have declined by 4.0 per cent.
RP Data’s director of research, Tim Lawless said that with home loan rates falling to below-average levels, disposable household incomes growing quickly and the cost of housing dropping, Australians are benefitting from a very welcome boost in overall housing affordability.
Across the capital cities there remains considerable dispersion in housing value movements.
Sydney and Canberra have been most resilient with dwelling values down by just 1.4 per cent and 1.1 per cent from their peaks, respectively.
In the month of October, Sydney and Canberra homes both produced flat to positive capital growth; 0.0 per cent and +1.6 per cent, respectively, while the other capitals posted declines ranging from -0.6 per cent in Melbourne to -1.6 per cent in Brisbane.
Source: Quartile Research, quartileresearch.com.au