Housing affordability generally in Canberra has improved, despite the sharp increases in house prices recorded by the local market so far this year.
An index of housing affordability that measures the average ACT owner-occupied home loan repayment as a proportion of local average household income decreased by 2.8 per cent over the June quarter.
Lower index results indicate a lower income proportion of home loan repayments and higher housing affordability.
Housing affordability has increased over consecutive quarters in the ACT and has now improved by 4.4 per cent over the past year and remains well below the peak in the ten-year series recorded over the March quarter 2008.
The ABS reported that owner-occupied lending in the ACT excluding refinancing soared to a record $933.5 billion over the June quarter.
This was an increase of 13.9 per cent compared to the previous March quarter and 6.4 per cent higher than the $876.7 billion recorded over the June quarter 2016.
The ACT reported an average owner-occupied loan of $377,376 over the June quarter, which was lower than the $382,924 recorded over the previous quarter and also lower than the $379,034 recorded over the June quarter last year.
The ACT average loan result remained well below NSW as the highest of all the states and territories with $467,144.
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The improvement in ACT housing affordability over the quarter, despite increased lending and higher house prices, reflects the impact of a lower average loan, lower borrowing costs for owner-occupiers and an increase in local incomes.
The ABS reports that the ACT Wage Index increased by 0.6 per cent over the June quarter, which is the highest of all the states and territories.
The ABS also reported average adult weekly earnings seasonally adjusted for the ACT of $1775.90 over the six months to May, which was an increase of 1.8 per cent over the previous six-month period ending November and also the highest of all the states and territories.
Dr Andrew Wilson is Domain Group chief economist. Twitter@DocAndrewWilson. Join on LinkedIn and Facebook at MyHousingMarket