If you’re not a member of the Australian mortgage (chain) gang yet, a study released this week might be bad news for you. According to the quarterly Housing Industry Association-Commonwealth Bank first home buyer affordability index study which was just published, affordability for buying a house (and the accompanying mortgage) in Australia has got worse again, and first home buyers might really struggle to break into the market. The statistics are quite shocking: the December quarter shows a fall of 18.4 per cent in affordability of housing for first home buyers, a huge drop especially when seen next to the annual fall of 22.3 per cent.
Basically, there are not enough houses available in Australia, and that’s what is making it tricky for everyone who wants to buy a home, but especially for those who want to purchase their first home and are coming to the market with a smaller amount of money to spend. The reasons for this are many, but Australia’s relatively fast growing population is one of the major problems. Across the country, they say that almost 200,000 brand new houses are needed, but only around three quarters of this number will get completed during 2010. That means the prices of houses, along with the average rental costs, are going to continue to rise during the year.
The worse news is that it doesn’t really seem to matter which part of Australia you’re living in – getting your house and mortgage is more difficult pretty much everywhere. Sydney is still the most unaffordable city to try to buy a house in, but affordabily has fallen dramatically across the country, with the worst falls in Sydney, Brisbane, Hobart and Canberra. With a forecast for increasing interest rates in the next few months, it doesn’t seem likely that there’ll be any good news for first home buyers (or others) on the affordability front in the near future.