{"id":21949,"date":"2018-08-05T01:00:14","date_gmt":"2018-08-04T15:00:14","guid":{"rendered":"https:\/\/realestatetalk.com.au\/?p=21949"},"modified":"2018-08-05T01:00:14","modified_gmt":"2018-08-04T15:00:14","slug":"australasias-most-affordable-capital-diwa-hopkins","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/","title":{"rendered":"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins"},"content":{"rendered":"

Easing house price pressures are proving some affordability relief for home buyers according to the HIA. Joining us to talk about this, HIA economist Diwa Hopkins.<\/strong>\u00a0\u00a0 Diwa says the most affordable capital right now was the least affordable only a few years ago.\u00a0 So what happened?<\/p>\n

Transcript:<\/strong><\/p>\n

Kevin:<\/strong>\u00a0 Easing house price pressures are proving some affordability relief for home buyers according to the HIA. Joining me to talk about this, HIA economist Diwa Hopkins.<\/p>\n

Diwa, thanks for your time.<\/p>\n

Diwa:<\/strong>\u00a0 Thank you for having me.<\/p>\n

Kevin:<\/strong>\u00a0 Where are we seeing this? Is it right around Australia, or are there different patches?<\/p>\n

Diwa:<\/strong>\u00a0 We\u2019re seeing affordability improve in most capital cities. The most affordable capital city at the moment is actually Perth, and so this is a very different story compared to what was happening quite a number of years ago right at the height of the resources boom.<\/p>\n

But what you\u2019re seeing in Perth now is a situation where the fallout of the downturn in the resources boom is actually leading to falling prices. By that token, that has improved affordability for home buyers. So, that\u2019s the city that\u2019s most affordable.<\/p>\n

Kevin:<\/strong>\u00a0 I\u2019ll ask you in a moment how you do actually measure affordability, but let\u2019s firstly talk about supply, because I imagine that\u2019s something that the HIA would be monitoring fairly closely.<\/p>\n

Diwa:<\/strong>\u00a0 Yes.<\/p>\n

Kevin:<\/strong>\u00a0 How have you seen supply compared to demand?<\/p>\n

Diwa:<\/strong>\u00a0 Over the past couple of years, Australia has seen really strong levels of new home building, and this level of supply coming on to the market has been a response to very strong population growth that previously was unmet by commensurate levels of building. That supply has started to respond to underlying demand. In turn, that has taken the heat out of a lot of price pressures that were building up in the market.<\/p>\n

Kevin:<\/strong>\u00a0 Yes. Have you any evidence of a lot of stockpiling of sites by developers who have decided they want to pull back until the market does actually improve a bit or catch up?<\/p>\n

Diwa:<\/strong>\u00a0 We can look at the overall balance of the market by looking at both purchase prices and also rental prices to get an overall sense of how balanced the market is. I\u2019d say in the major capital cities, particularly Sydney and Melbourne, we get an impression that these markets are pretty well balanced.<\/p>\n

So, you have this situation whereby especially in Sydney, over the long term, you had a combination of strong dwelling price growth as well as rental prices, so that, to us, suggests that you have this persistent under supply and only more recently have dwelling prices been coming back, whereas rental prices, on the other hand, have retained a fairly steady pace of increase. So, to us, that suggests that you have a pretty even match between supply and demand.<\/p>\n

Kevin:<\/strong>\u00a0 I notice the affordability index, if it\u2019s measured over the last 20 years, there are only a couple of capital city markets where the affordability index is actually lower than the 20-year average \u2013 those being Sydney, Melbourne, and Hobart. Overall, the average across all capital cities, the index is actually higher than the 20-year average.<\/p>\n

Diwa:<\/strong>\u00a0 Yes, that\u2019s right. What stands out in particular is Perth and that\u2019s that price story coming through there. But yes, you\u2019re right. What we\u2019re seeing particularly in Sydney and Melbourne, for example, where affordability is lower than its 20-year average, is the effect of the previous very strong house price growth, and so we\u2019re only just pulling back from previous very strong price growth.<\/p>\n

Kevin:<\/strong>\u00a0 How do you measure affordability?<\/p>\n

Diwa:<\/strong>\u00a0 We look at house prices and what the associated mortgage repayments would be at the current interest rate settings. We look at the earnings of each of the capital cities, and we consider an affordable repayment to be 30% of earnings. If mortgage repayments exceed 30%, then the corresponding affordability reading will be a threshold of 100, so we set that index to equal 100.<\/p>\n

Kevin:<\/strong>\u00a0 The average across all the capital cities, according to your information, is 71.3. How does that measure? Is that acute or is it promising?<\/p>\n

Diwa:<\/strong>\u00a0 Critically, it\u2019s below an index reading of 100, so it tells us that under current price settings and interest rate settings, mortgage repayments are amounting to more than 30% of an average wage.<\/p>\n

Kevin:<\/strong>\u00a0 I understand that, but there\u2019s only one capital city in Australia where it\u2019s actually over 100, and that\u2019s Perth.<\/p>\n

Diwa:<\/strong>\u00a0 That\u2019s right. So, that\u2019s why we have this overall average across capital cities where the reading on average is less than 100.<\/p>\n

Kevin:<\/strong>\u00a0 How often is that 30% benchmark changed or altered? Or is it never altered?<\/p>\n

Diwa:<\/strong>\u00a0 No, it\u2019s never altered. It\u2019s an industry-wide rule of thumb.<\/p>\n

Kevin:<\/strong>\u00a0 A barometer.<\/p>\n

Diwa:<\/strong>\u00a0 That\u2019s right.<\/p>\n

Kevin:<\/strong>\u00a0 I\u2019ve been talking to Diwa Hopkins who is the HIA economist. Thank you very much for your time, Diwa.<\/p>\n

Diwa:<\/strong>\u00a0 Pleasure. Thanks for having me.<\/p>\n","protected":false},"excerpt":{"rendered":"

Easing house price pressures are proving some affordability relief for home buyers according to the HIA. Joining us to talk about this, HIA economist Diwa Hopkins.\u00a0\u00a0 Diwa says the most affordable capital right now was the least affordable only a few years ago.\u00a0 So what…<\/p>\n","protected":false},"author":176692473,"featured_media":21942,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,10,11,13,36,22,25],"tags":[101],"class_list":["post-21949","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nAustralasia\u2019s most affordable capital \u2013 Diwa Hopkins - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Easing house price pressures are proving some affordability relief for home buyers according to the HIA. Joining us to talk about this, HIA economist Diwa Hopkins.\u00a0\u00a0 Diwa says the most affordable capital right now was the least affordable only a few years ago.\u00a0 So what...\" \/>\n<meta property=\"og:url\" content=\"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/\" \/>\n<meta property=\"og:site_name\" content=\"Realty Talk\" \/>\n<meta property=\"article:published_time\" content=\"2018-08-04T15:00:14+00:00\" \/>\n<meta name=\"author\" content=\"Kevin Turner\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Kevin Turner\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\\\/\\\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/#article\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/\"},\"author\":{\"name\":\"Kevin Turner\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/ae5a3b5e891767bd82ad3a068c514329\"},\"headline\":\"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins\",\"datePublished\":\"2018-08-04T15:00:14+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/\"},\"wordCount\":850,\"commentCount\":0,\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"keywords\":[\"podcast\"],\"articleSection\":[\"Buying a property\",\"Kevin Turner\",\"Kevin's Update\",\"Latest Stories\",\"Property Investment\",\"Research\",\"Sponsored Channels\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/\",\"name\":\"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins - Realty Talk\",\"isPartOf\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/#primaryimage\"},\"image\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/#primaryimage\"},\"thumbnailUrl\":\"\",\"datePublished\":\"2018-08-04T15:00:14+00:00\",\"author\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/ae5a3b5e891767bd82ad3a068c514329\"},\"breadcrumb\":{\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/#primaryimage\",\"url\":\"\",\"contentUrl\":\"\"},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/australasias-most-affordable-capital-diwa-hopkins\\\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#website\",\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/\",\"name\":\"Realty Talk\",\"description\":\"Your Trusted Voice For Property Investing. Anywhere, Anytime.\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/#\\\/schema\\\/person\\\/ae5a3b5e891767bd82ad3a068c514329\",\"name\":\"Kevin Turner\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/d2d83fe833d0cb22c11728d9aa25f73b319e658b72509553eff8680404d8bfa7?s=96&d=mm&r=g\",\"url\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/d2d83fe833d0cb22c11728d9aa25f73b319e658b72509553eff8680404d8bfa7?s=96&d=mm&r=g\",\"contentUrl\":\"https:\\\/\\\/secure.gravatar.com\\\/avatar\\\/d2d83fe833d0cb22c11728d9aa25f73b319e658b72509553eff8680404d8bfa7?s=96&d=mm&r=g\",\"caption\":\"Kevin Turner\"},\"url\":\"https:\\\/\\\/channels.realty.com.au\\\/realtytalk\\\/author\\\/kevin-turner\\\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins - Realty Talk","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/","og_locale":"en_US","og_type":"article","og_title":"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins - Realty Talk","og_description":"Easing house price pressures are proving some affordability relief for home buyers according to the HIA. Joining us to talk about this, HIA economist Diwa Hopkins.\u00a0\u00a0 Diwa says the most affordable capital right now was the least affordable only a few years ago.\u00a0 So what...","og_url":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/","og_site_name":"Realty Talk","article_published_time":"2018-08-04T15:00:14+00:00","author":"Kevin Turner","twitter_card":"summary_large_image","twitter_misc":{"Written by":"Kevin Turner","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/#article","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/"},"author":{"name":"Kevin Turner","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/ae5a3b5e891767bd82ad3a068c514329"},"headline":"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins","datePublished":"2018-08-04T15:00:14+00:00","mainEntityOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/"},"wordCount":850,"commentCount":0,"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/#primaryimage"},"thumbnailUrl":"","keywords":["podcast"],"articleSection":["Buying a property","Kevin Turner","Kevin's Update","Latest Stories","Property Investment","Research","Sponsored Channels"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/","url":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/","name":"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins - Realty Talk","isPartOf":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website"},"primaryImageOfPage":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/#primaryimage"},"image":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/#primaryimage"},"thumbnailUrl":"","datePublished":"2018-08-04T15:00:14+00:00","author":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/ae5a3b5e891767bd82ad3a068c514329"},"breadcrumb":{"@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/"]}]},{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/#primaryimage","url":"","contentUrl":""},{"@type":"BreadcrumbList","@id":"https:\/\/channels.realty.com.au\/realtytalk\/australasias-most-affordable-capital-diwa-hopkins\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/channels.realty.com.au\/realtytalk\/"},{"@type":"ListItem","position":2,"name":"Australasia\u2019s most affordable capital \u2013 Diwa Hopkins"}]},{"@type":"WebSite","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#website","url":"https:\/\/channels.realty.com.au\/realtytalk\/","name":"Realty Talk","description":"Your Trusted Voice For Property Investing. Anywhere, Anytime.","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/channels.realty.com.au\/realtytalk\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/channels.realty.com.au\/realtytalk\/#\/schema\/person\/ae5a3b5e891767bd82ad3a068c514329","name":"Kevin Turner","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/secure.gravatar.com\/avatar\/d2d83fe833d0cb22c11728d9aa25f73b319e658b72509553eff8680404d8bfa7?s=96&d=mm&r=g","url":"https:\/\/secure.gravatar.com\/avatar\/d2d83fe833d0cb22c11728d9aa25f73b319e658b72509553eff8680404d8bfa7?s=96&d=mm&r=g","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/d2d83fe833d0cb22c11728d9aa25f73b319e658b72509553eff8680404d8bfa7?s=96&d=mm&r=g","caption":"Kevin Turner"},"url":"https:\/\/channels.realty.com.au\/realtytalk\/author\/kevin-turner\/"}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/21949","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/users\/176692473"}],"replies":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/comments?post=21949"}],"version-history":[{"count":0,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/posts\/21949\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/"}],"wp:attachment":[{"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/media?parent=21949"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/categories?post=21949"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/channels.realty.com.au\/realtytalk\/wp-json\/wp\/v2\/tags?post=21949"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}