Housing is as affordable the way it became a decade ago

THIS home at Oakdale Rd, New Norfolk recently sold for $316,000. It can be in one of Australia’s most economical suburbs.

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DESPITE what many buyers might imagine, new research has shown Australian homes are nevertheless as affordable as they were about ten years ago.

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

He was quoted saying this ratio was broadly unchanged at a decade ago.

“In the last decade disposable income per household has risen around 70 per cent while the

average home price has lifted around 67 percent,’’ he was quoted saying.

“Home values could be up, but so are disposable incomes,’’ he explained.

Mr James said Australians had become richer with time as well as in days gone by decade, incomes had grown slightly faster than home prices.

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

sideways,’’ he explained.

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

But he was quoted saying after you checked out it from the purely financial ratio, things hadn't changed much.

“Certainly homes are less affordable than 19 years ago, but that is not because income growth has become sluggish, but because wealthier Australians, using lower rates of interest, and benefiting

from cheaper basic necessities like food, clothing and transport, have channelled extra dollars to the house.

“Homes are bigger and of higher quality than 2 decades ago.’’

Mr James said the modern 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.

“In the last 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 within the last few decade, the average income per household has risen by 70.6 per cent, outpacing a 66.7 percent lift in home prices.’’

In accordance with RP Data, a lot of Australia’s most economical suburbs come in South Australia, Queensland or Tasmania.

It found Elizabeth Vale, in Adelaide was Australia’s lowest priced capital city suburb.

The northern Adelaide suburb features a median property value 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 air conditioning. Picture: realestate.com.au Source: Supplied

Nearby Elizabeth North was the 2nd most affordable suburb which has a median property valuation on $159,438. The suburb was established with the South Australian Housing Rely upon 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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