Sacha
Ass. Perth Promotor
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MELBOURNE has for the first time overtaken Sydney to become the least affordable city in Australia for would-be home owners.
Despite a glut of housing on the Melbourne market, buying a house in the city is now more difficult than Sydney, according to the HIA-Commonwealth Bank Housing Affordability Index.
Based on the combined impact of interest rates, property prices and household incomes, data for the September quarter lists Melbourne at 50.8 compared with Sydney's index rating of 51.5.
The index shows the next least affordable city is Perth on 54.9, followed by the ACT on 57.8, then Brisbane on 58.1 and Adelaide on 59.4.
Hobart is the country's most affordable city, well above the rest of the cities on 71.9, with a median house price of $325,000 and an average income of $60,500.
And even though the nation on average saw a slight cooling in property prices, it is still harder to afford a home now than it was 12 months ago.
HIA's chief economist, Dr Harley Dale, said Melbourne's lower wages and increasing property prices had pushed it into the No. 1 spot, and revised HIA data showed it overtook Sydney in the March quarter.
"Melbourne has been the least affordable city over the last three quarters," he said. "Melbourne had a strong surge in home prices up until quite recently and that surge was far greater than anything we've seen elsewhere.
"It has caused a considerable problem in terms of affordability."
Nationally, he said the three interest rises in the first half of the year meant affordability "is once again on a clear downward trajectory".
"A further rate hike in November will see affordability drop in the December quarter, an outcome obviously not aided by trading banks adding fuel to the mortgage rate fire," he said.
"For aspiring home owners trying to break into the housing market, the short-term outlook is a challenging one.
"It now takes an income double the average to affordably service a mortgage on a median-priced dwelling in Australia's two largest cities."
Robert Larocca, of the Real Estate Institute of Victoria, said Melbourne had seen a big drop in affordability since the global financial crisis.
"The two key reasons are our rate of population growth has doubled, yet we have not been building enough homes to meet that demand," he said.
"We've also seen stamp duty rates increase."
MELBOURNE has for the first time overtaken Sydney to become the least affordable city in Australia for would-be home owners.
Despite a glut of housing on the Melbourne market, buying a house in the city is now more difficult than Sydney, according to the HIA-Commonwealth Bank Housing Affordability Index.
Based on the combined impact of interest rates, property prices and household incomes, data for the September quarter lists Melbourne at 50.8 compared with Sydney's index rating of 51.5.
The index shows the next least affordable city is Perth on 54.9, followed by the ACT on 57.8, then Brisbane on 58.1 and Adelaide on 59.4.
Hobart is the country's most affordable city, well above the rest of the cities on 71.9, with a median house price of $325,000 and an average income of $60,500.
And even though the nation on average saw a slight cooling in property prices, it is still harder to afford a home now than it was 12 months ago.
HIA's chief economist, Dr Harley Dale, said Melbourne's lower wages and increasing property prices had pushed it into the No. 1 spot, and revised HIA data showed it overtook Sydney in the March quarter.
"Melbourne has been the least affordable city over the last three quarters," he said. "Melbourne had a strong surge in home prices up until quite recently and that surge was far greater than anything we've seen elsewhere.
"It has caused a considerable problem in terms of affordability."
Nationally, he said the three interest rises in the first half of the year meant affordability "is once again on a clear downward trajectory".
"A further rate hike in November will see affordability drop in the December quarter, an outcome obviously not aided by trading banks adding fuel to the mortgage rate fire," he said.
"For aspiring home owners trying to break into the housing market, the short-term outlook is a challenging one.
"It now takes an income double the average to affordably service a mortgage on a median-priced dwelling in Australia's two largest cities."
Robert Larocca, of the Real Estate Institute of Victoria, said Melbourne had seen a big drop in affordability since the global financial crisis.
"The two key reasons are our rate of population growth has doubled, yet we have not been building enough homes to meet that demand," he said.
"We've also seen stamp duty rates increase."
