|Adjustments||Not Seasonally Adjusted|
|Source||Commonwealth Bank Housing Industry Association Australia|
|Release||Housing Affordability Index|
|Residential Building Permits||Jan 2023||12,065||16,673||#, SA||Monthly|
|Building Completions||2022 Q4||30,578,567||31,070,888||Ths. Ch. AUD, SA||Quarterly|
|Non-residential Building Completions||2022 Q4||12,140,338||12,797,905||Ths. Ch. AUD, SA||Quarterly|
|Residential Building Completions||2022 Q4||15,906,489||15,603,905||Ths. Ch. AUD, SA||Quarterly|
|Housing Starts||2022 Q3||28,895||30,374||#, SA||Quarterly|
|Residential Housing Starts||2022 Q3||16,139||17,102||#, SA||Quarterly|
|House Price Index||2021 Q4||195.45||187.05||Index FY 2012=100, SA||Quarterly|
|House Price Value||2021 Q2||619,804||590,891||AUD, NSA||Quarterly|
For Australia, the HIA (Housing Industry Association) Housing Affordability Index measures accessibility to home ownership for an average first home buyer. A result of 100 means that 30% of earnings are absorbed by mortgage repayments. A value above (below) 100 means the mortgage burden is more (less) manageable.
It is measured by a ratio, average income per household to the income necessary to meet repayments (repayment burden), for on an average established dwelling purchased by first-time home buyers (qualifying income). Thus an increase in the ratio represents an improvement in affordability while a decline represents a deterioration in affordability.
In calculating the index is estimating the value of a mortgage repayment representative of someone who purchased a home during the reference period. This requires a number of assumptions. A mortgage repayment is dependent on the size of the loan, the prevailing mortgage interest rate, and the mortgage term.
Qualifying income is a notional amount at which mortgage repayments are equivalent to exactly 30 per cent of income (the lowest income level at which the mortgage repayment would be affordable):
The affordability index is calculated by dividing the actual level of earnings by the qualifying income:
The affordability multiple describes the multiple of average full-time earnings required to affordably service mortgage repayments under prevailing conditions. The affordability multiple is calculated as follows:
Seasonality: The components used in construction of the index are seasonally adjusted, but the index itself is not seasonally adjusted after construction. The index is compiled in a way that means it does not have seasonal characteristics.
The affordability index levels for all previous quarters have been revised to reflect the CoreLogic RP Data price series.
The HIA-Commonwealth Bank (HIA-CBA) Housing Affordability Index was a joint project. Between 2014 and 2017, it ceased to be co-branded.
The Housing Industry Association Limited (HIA) is a national industry association of residential builders and suppliers. It was formed in 1965, as an extension of a regional assocation (the Builders and Allied Trades Assocation, BATA) formed in 1946.
Commonwealth Bank (CBA) is Australia's leading provider of integrated financial services.
At the source: