Houses set to become more affordable

Housing is now much more affordable than it was 12 months ago, despite deteriorating affordability over the last two months. The Housing Industry Association and Commonwealth Bank First Home Buyer Affordability index is now 41 per cent higher than it was last year. However the index declined five per cent over the three months to June 30.

HIA chief economist Harley Dale said the market was neither in boom or bust conditions. "A step-down in the first home owner grant boost and a lengthening pipeline of new housing supply will help to keep established house prices in check, while low interest rates will keep affordability close to seven-year highs through the second half of 2009,” he said.

Source: The Daily Telegraph