Nationally, housing affordability improved by 3.6 per cent in the September 2010 quarter due to an easing in the median dwelling price. However, housing affordability across the nation remains 18.3 per cent lower than a year ago.
The Housing Industry Association (HIA) says Melbourne's would-be home buyers have the least affordable housing of any capital city.
Housing affordability in Melbourne improved by 1.7 per cent in the September 2010 quarter, however it was down significantly on the previous year.
HIA Victorian executive director Gil King says: "The worsening affordability in Melbourne is the result of median dwelling prices having increased somewhat faster than incomes, and the problem is compounded by rising borrowing costs.
"The level of income required to service mortgage repayments on a median priced home in Melbourne is now double the city's average full time earnings.
"The three interest rate rises in the first half of 2010 have really hit home and the rate rises we saw in November will see housing affordability deteriorate in the December quarter.
"Action is required at all levels of Government to ensure an adequate supply of new housing so as to ease the affordability burden, particularly for those trying to enter the market for the first time.”
