Which city has Australia's most affordable housing?

November 28, 2012, 9:55 amYahoo7

Sydney's housing is at its most affordable since the financial crisis but it's still not the country's cheapest.

In news that would make would-be home buyers happy, there has been a steady increase in housing affordability in all states around Australia.

The Housing Industry Association/Commonwealth Bank housing affordability index has shown a rise of 5.3 per cent in the September quarter, for a reading of 65.8.

The index shows properties have become more affordable in all regions, with Hobart the most affordable city in Australia, at 78.3, Adelaide at 71.1 and Brisbane 68.5.

Melbourne scored 63.6 and Perth at 64.1.

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Sydney was the least affordable among all cities, with an index of 54.2 despite its housing being at its most affordable levels since the global financial crisis.

Sydney's housing affordability index has risen by 13 per cent since the 2011 March quarter.

The improvement in the relative cost of buying a home has been the result of combination of interest rates decreases, stable property prices and rising wages, according to the quarterly Housing Industry Association-Commonwealth Bank housing affordability index.

As a result, the average monthly loan repayment for Sydney has dropped by $422 to $3453 in the period.

The Housing Industry Association's chief economist, Dr Harley Dale, told The Sydney Morning Herald housing in Sydney was now more affordable than at any time since the 2002 June quarter.

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"It gives another tick in the box that gives us optimism that we'll finally see a housing recovery in 2013," Dr Dale said.

"We can have some confidence that moderate price growth will return to the market over the next couple of years, but I don't think we need to fear another price boom lurking around the corner."

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Australia's cheapest suburb. Photo: REA Images

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