Housing affordability may become as bad as in 2007, one industry expert has said.
Successive
interest rate increases have taken their toll on the housing industry, according to one expert.
Housing Industry Association (HIA) senior economist Ben Phillips has predicted that the April and May rises by the Reserve Bank of Australia – of 0.25 per cent each, eventually leaving the official cash rate at 4.5 per cent – could see the property affordability reach lows like those seen in 2007, the Sydney Morning Herald reports.
And at this time the mortgage rates were greater than nine per cent.
He added: "Higher interest rates, exorbitant infrastructure charges, an overly restrictive and time consuming planning system continue to fuel Australia's affordability crisis."
A survey by the Commonwealth Bank – which offers a variety of
credit cards and savings accounts - and the HIA showed that first-time buyers' affordability decreased by four per cent in the March quarter, the smallest since September 2008.
Earlier this month, JP Morgan economist Helen Kevans noted that the demand for home loans was being affected by the interest rate rises, the Australian Associated Press reported.
By Joe Letts
