Perth sees biggest improvement in housing affordability year-on-year

According to the group, Perth’s index is up by 15.3 per cent, followed by Darwin with 13.5 per cent, Sydney with 11.9 per cent, Melbourne with 11.6 per cent and Brisbane with 7.0 per cent.

Meanwhile Adelaide’s affordability index is up by 4.9 per cent, Hobart’s by 3.3 per cent and Canberra’s by 1.4 per cent.

“The cuts to interest rates have more than offset the rise in home prices to ensure an ongoing improvement in housing affordability,” said Tim Reardon, HIA’s chief economist.

“Australians are still a nation that aspires to own a home. Over 90 per cent of renters want to own their own home, partly due to the financial stability it provides in retirement.

“With little opportunity for interest rates to be reduced further, improvements in affordability will require the right economic conditions with a strong volume of new homes, low interest rates and supportive policy settings from state and federal governments.

“Up to 50 per cent of the cost of a house and land package can be red tape and taxes. Reducing the tax on homes and ensuring an adequate supply of homes is an ongoing challenge for governments,” concluded Mr Reardon.