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Where’s property affordability heading?

By Kevin Kelly

Affordability has been a major concern for the property sector for a while now – and real estate in Bunbury is no exception. With prices rising across many parts of the country and worries about first-time buyers not being able to enter the market coming to the surface, it's certainly been a hot topic of conversation.

However, some headway does seem to have been made during the first half of 2016, as experts point towards factors that are working in favour of buyers. In fact, the Real Estate Institute of Australia (REIA) announced not too long ago that affordability had returned to 2013 levels!

As we leap into the final months of the year, what better time to look back at affordability – and see exactly which direction it's heading in.

Spotlight on house price growth

The REIA announced that property prices were in decline during the first quarter of the year, therefore helping first-time buyers get their footing on the ladder. The Australian Bureau of Statistics placed the mean dwelling price at $613,900, suggesting there's potential to buy affordable housing in many parts of the country.

It wasn't so long ago that experts warned rising property prices could create a bubble, meaning a situation would eventually emerge where people were unable to afford to buy real estate in Bunbury. However, this doesn't seem to have been the case up to the midpoint of the year.

The current situation

As the winter months approached, affordability once again started to take a back seat. The Housing Industry Association's Affordability Report found that affordability was down 3.7 per cent during the three months to June, putting it 2.1 per cent lower than it was a year ago.

However, it's important to remember that this is the national picture. Certain pockets of property, such as real estate in Eaton, may not necessarily be affected by this trend.

"The geographic variation in affordability is most evident in the comparison between Melbourne and Perth," said HIA economist, Geordan Murray.

"Over the last year, the median dwelling price in Perth has fallen by 4.7 per cent while Melbourne's has grown by 11.5 per cent."

Summer is typically an active time for the property market, so all eyes will be on the sector to see how it performs towards the end of the year. For the time being at least, affordability doesn't seem to be completely out of reach, and future buyers will be hopeful that the situation continues.

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