Housing affordability fell slightly in the December quarter as the boost from earlier interest rate cuts tapered off, the Housing Industry Association says.
The HIA-Commonwealth Bank Housing Affordability Index fell by 0.5 per cent in the December 2013 quarter, but remained 8.4 per cent higher than in the December 2012 quarter.
HIA chief economist Harley Dale said borrowing costs are at record lows but the effect of the most recent rate cut in August had "largely washed through the system" in the December quarter.
"In 2014 we are likely to see further gains in residential property prices, but in an environment of subdued household earnings growth and steady interest rates," Mr Dale said.
"The strong cyclical improvement to affordability for existing participants in the home ownership market has therefore run its course."
Yesterday, Reserve Bank of Australia Governor Glenn Stevens noted "abundant signs of confidence" in the housing market.