Housing less affordable than before pandemic

By Georgia Tacey

Jun 29, 2023

Fenced off: Affording a home in regional Victoria became more expensive in the most recent quarter. Photo by Rodney Braithwaite

The Housing Industry Association released its Affordability Index report last week — and it was more bad news for mortgage holders and potential buyers.

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The index is calculated for each of the eight capital cities and regional areas on a quarterly basis and considers the latest dwelling prices, mortgage interest rates and wage developments.

The HIA Affordability Index saw all capitals fall, except Hobart, which saw an increase. In Melbourne, the figure fell by 1.3 per cent, while regional Victoria fell by one per cent.

HIA deputy managing director for policy and industry Jocelyn Martin said that after the Affordability Index fell by 1.1 per cent in the last quarter, houses were now 25 per cent less affordable than before the pandemic.

“Housing affordability poses a major challenge across the country, and the issue is paramount on the policy agenda of all levels of government,” Ms Martin said.

“This makes measures that do not increase the number of homes, such as convoluted planning processes and the heavy burden of taxation, likely to fail.

“The Australian Government has spoken widely about a plan to pass legislation, the Housing Australia Future Fund Bill 2023, which aims to improve the quality of housing data, improve forecasting of housing demand and collaborate with states and territories to improve the supply of housing.”