Home News Why supply and demand are the ultimate indicators of housing affordability

Why supply and demand are the ultimate indicators of housing affordability

Font size :

Dwelling prices in Australia are gradually returning to more affordable levels.

While the current housing downturn is believed to be driven by the credit squeeze as banks tighten their lending screws, the Housing Industry Association (HIA) said the supply of dwellings will ultimately dictate where prices will go.

HIA principal economist Tim Reardon said the record-breaking number of new homes established over the past four years has led to prices returning to more affordable levels.

Recent figures from CoreLogic point to a continued decline in prices last month as national median dwelling values fell by 1%. From its peak in late 2017, the overall median house price has already fallen by 6.1%.

"Housing affordability is about supply and demand, and for most of this century there have been constraints on new home building that have limited supply and forced up prices," Reardon said.

In fact, these limits on new home building have resulted in Sydney recording an 82% growth in prices over the last six years leading to the end of 2017.

"Since 2014, Australia has built an unprecedented volume of new homes, and we are starting to see affordability indicators improve," Reardon said.

Another sign that the surge in demand for new housing has already been met is the stall in rental-price inflation over the past year, particularly in Sydney and Melbourne.

"There have now been 14 consecutive quarters where rental price growth has been below inflation. This is great news for renters," Reardon said.

Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker

Mortgage News and Articles

What you need to know when buying a tenanted property What you need to know when buying a tenanted property

Are you occupying the property or are you taking over as the landlord? Read more

Consider these things before you fix your home loan rate Consider these things before you fix your home loan rate A fixed-rate home loan has its pros and cons — see if it fits your current needs ... Read more

How long does a loan or mortgage pre-approval last? How long does a loan or mortgage pre-approval last? A pre-approval can be a huge head start in your home buying journey ... Read more

Understanding comparison rates Understanding comparison rates Comparison rates help you find out how much your home loan really costs ... Read more

More mortgage news and articles

Sponsored Links

Saturday, Feb 23, 2019
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords