Housing remains 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 economical suburbs.

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DESPITE what many buyers might think, new research has shown Australian homes continue to be as affordable while they were about ten years ago.

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

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

“Within the last few decade disposable income per household has risen around 70 per-cent even though the

average home price has lifted around 67 per-cent,’’ he explained.

“Home prices may be up, but so might be disposable incomes,’’ he explained.

Mr James said Australians had become richer as time passes as well as in the last decade, incomes had grown slightly faster than home values.

“But broadly above the decade little has changed in terms of home affordability - it offers gone

sideways,’’ he explained.

He said certainly people spent much more about homes together bigger and better homes than they did a decade ago, to make sure they thought housing was less affordable.

But he said when you checked out it from your purely financial ratio, things had not changed much.

“Certainly homes are less affordable than twenty years ago, but that's not because income growth continues to be sluggish, but because wealthier Australians, using lower interest rates, and benefiting

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

“Homes are bigger and of higher quality than 19 years ago.’’

Mr James said the latest figures on 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 per-cent lift in income per household,’’ Mr James said

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

In accordance with RP Data, lots of Australia’s least expensive suburbs come in South Australia, Queensland or Tasmania.

It found Elizabeth Vale, in Adelaide was Australia’s least expensive capital city suburb.

The northern Adelaide suburb carries a median property price 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 next least expensive suburb having a median property value of $159,438. The suburb was established by 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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