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Further Rises in ACT Property Affordability

By Ben Faulks

There have been further rises in property affordability across the ACT, which could increase demand for Belconnen apartments and other properties in the area.

The HIA-CBA Housing Affordability Index improved 5.5 per cent in the December 2012 quarter, marking the eighth month in a row that the index rose.

As the Housing Industry Association's senior economist Shane Garrett pointed out, this brought the index back in line with levels not seen since before the depths of the global financial crisis back in 2009.

The ACT was no exception to this trend – it registered a reading of 56.2 on the index in the June quarter of 2011, increasing to 74 in the three months to December 2012.

Mr Garrett explained that there are various reasons behind this improvement, namely two cash rate reductions from the Reserve Bank of Australia (RBA) in the final quarter of last year.

"For regional areas, affordability is at levels last seen during the early 2000s decade. Affordability is on the increase in every part of the country," he commented.

The RBA decided to keep the official cash rate at three per cent when it met on March 5, despite growing pressure from groups such as the HIA for another reduction.

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