REGIONAL Australia was bucking the trend in housing affordability, according to a latest report on conditions.
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While a fall in the HIA Affordability Index in the June quarter signalled a deterioration in conditions in metro areas, regional Australia again improved, said HIA chief economist Harley Dale.
Mr Dale said the positive impact of a second interest rate cut for the year in May was overwhelmed by an increase in median dwelling price in capital city markets, which led to a 3.8 per cent deterioration in affordability. This was in contrast to a 2.7 per cent improvement in regional areas.
Compared with the June quarter last year, capital city affordability dropped 0.6 per cent, while in regional areas it improved 5.2 per cent.
The figures indicated there wasn’t a clear housing boom sweeping the nation, only in certain areas, with regionals performing well, he said.
“In many parts of Australia the extremely low interest rate environment is delivering historically favourable affordability conditions,” Mr Dale said.
And, rationing credit to investors risked slowing the construction industry, thereby aggravating affordability.