Housing continues to be as affordable because it would be a decade ago

THIS home at Oakdale Rd, New Norfolk recently sold for $316,000. It's a single of Australia’s most affordable suburbs.

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DESPITE what many buyers may think, new research has revealed Australian homes are still as affordable when they were ten years ago.

Analysis by CommSec chief economist Craig James has revealed that home prices are about four times household disposable income.

He explained this ratio was broadly unchanged coming from a decade ago.

“Over the past decade disposable income per household has risen around 70 % while

average home price has lifted around 67 %,’’ he explained.

“Home values could be up, but so are disposable incomes,’’ he was quoted saying.

Mr James said Australians had become richer after a while as well as in earlier times decade, incomes had grown slightly faster than home prices.

“But broadly on the decade little has changed with regard to home affordability - it has gone

sideways,’’ he was quoted saying.

He explained certainly people spent more about homes together bigger and better homes than they did ten years ago, so they thought housing was less affordable.

But he explained if you checked out it from a purely financial ratio, things had not changed much.

“Certainly homes are less affordable than 20 years ago, that is not because income growth has been sluggish, but because wealthier Australians, using lower mortgage rates, and benefiting

from cheaper basic necessities like food, clothing and transport, have channelled extra dollars in the family home.

“Homes are bigger and of top quality than twenty years ago.’’

Mr James said the most recent figures through the RP Data/Rismark Home value index showed the median price of a home across Australia, was $450,000.

The Australian Bureau of Statistics national accounts estimate of disposable income per household was $111,919.

“Over the past year the median home price rose by 5.9 per cent, outpacing the 1.7 percent lift in income per household,’’ Mr James said

“But interestingly over the past decade, the standard income per household has risen by 70.6 percent, outpacing a 66.7 % lift home based prices.’’

As outlined by RP Data, most of Australia’s most inexpensive suburbs come in South Australia, Queensland or Tasmania.

It found Elizabeth Vale, in Adelaide was Australia’s most inexpensive capital city suburb.

The northern Adelaide suburb incorporates a median property importance of $143,452.

Recent sales include, 21 Rollison Rd, Elizabeth Vale which sold for $195,000.

21Rollison Rd, Elizabeth Vale has four bedrooms and ducted heating and cooling. Picture: realestate.com.au Source: Supplied

Nearby Elizabeth North was the 2nd most affordable suburb with a median property worth of $159,438. The suburb was established because of the South Australian Housing Trust in 1955.

Recent sales include 11 Chirton St, Elizabeth North which sold for $142,500.


The timber-frame home at Chirton St, Elizabeth North has three bedrooms.Source: Supplied

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