The Housing Industry Association (HIA) warned that Canberra may soon go past Sydney in terms of housing affordability as situation continues to dwindle. Canberra was ranked as one of the most expensive in capital cities in Australia for those who buy home for the first time.

While prices of average ACT dwelling in the city surged nearly 29 per cent over the past 12 months, the Affordability Index declined to 105 from 142 during the same period, HIA said. The decline in the Affordability Index meant a
26 per cent drop in first home buyers' affordability.

As per data published, Sydney remained the most unaffordable capital city in the country followed by Brisbane. Housing affordability also took a hit in Brisbane in the last quarter falling 22.3 per cent. On a 12-month basis, affordability in Brisbane, at the end of 2009, was 28.6 per cent lower than the previous year. Sydney, Brisbane, Hobart and Canberra were the capital cities, which witnessed the largest falls in first home buyer affordability.

Meanwhile, economists have said that currently housing repayments are costing the first home buyers over 30 per cent of their monthly income.