Housing affordability has decreased in the territory for the first time in about three years following a national trend, a new report says.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
The HIA-Commonwealth Bank Affordability Index for the December quarter shows that Canberra recorded a decline of 1.2 per cent at the end of last year.
The report, which was issued on Thursday, attributes the fall in affordability to the decline in weekly average earnings for the first time in more than four years.
"This development offset any affordability-boosting effects of the 0.3 per cent decline in the median dwelling price and the fairly marginal decline in discounted mortgage lending rates," the report said.
While it was Canberra's first affordability decline since March 2011, the ranking is still high compared to recent scoring on the index. The index declined in the December quarter from 84.1 per cent to 83.1 per cent, which is still 12 per cent higher than in the same quarter in 2012.
Housing affordability declined nationally by 0.5 per cent in December after being at its highest level in more than a decade in the previous quarter.
The report said across Australia housing affordability weakened in the December quarter as dwelling prices continued to rise while earnings increases were modest and mortgage rates declined only marginally.
HIA chief economist Harley Dale said while a decline could be seen in Canberra's affordability it was still a pretty healthy outcome because it was the second highest reading in a number of years.
He said interest rates had remained steady since the last cut in August and the improvement from lower borrowing costs had largely run its course.
Mr Dale also said while some commonality could be found with the decline in other states the difference in Canberra had been the job cuts and ongoing uncertainty around job security.
He said Canberra's affordability would likely remain stable this year and while it may fluctuate slightly it would still remain at historically high levels.
Nationally he said those who had entered the property market in recent years and those already in it had experienced a considerable improvement in affordability due to the easing interest rate cycle which left borrowing rates at near record lows.
The HIA New House Affordability Index remained similar to last quarter with new houses remaining slightly less affordable than established houses.
