Housing affordability index rises 6.4 per cent
Real estate affordability has hit a two year high according to the latest HIA-Commonwealth Bank Housing Affordability Index.
The index rose 6.4 per cent during the March quarter, taking it to 61.8 - that's a total increase of 11 per cent from this time last year.
The HIA-Commonwealth Bank Housing Affordability Index looks at the average relationship between the price of housing, household incomes and mortgage costs in order to establish the overall affordability of buying a property in Australia.
This latest report will be seen as good news for first time buyers, as well as those seeking to purchase further property.
HIA senior economist Andrew Harvey believes the upward swing is an amalgamation of several different factors.
"In the March quarter we observed a modest increase in earnings, a modest decline in lending rates and a softening in the median dwelling price, so all factors moved in a direction which improved housing affordability," said Harvey.
Harvey also believes the upward trend may be set to continue throughout the rest of the year.
"We should see further improvement in coming quarters as the May rate cut flows through," he said.
Melbourne has shown the greatest improvement in affordability, with the index showing a rise of 7.3 per cent during the period between January and March 2012.
With an index of 73, Hobart is currently the most affordable real estate market in Australia.