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

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

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

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

He said this ratio was broadly unchanged at a decade ago.

“Within the last few decade disposable income per household has risen around 70 % as you move the

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

“Home prices can be up, but so might be disposable incomes,’’ he said.

Mr James said Australians had become richer over time and in earlier times decade, incomes had grown slightly faster than home prices.

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

sideways,’’ he said.

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

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

“Certainly homes are less affordable than 2 decades ago, but that is not because income growth has been sluggish, but because wealthier Australians, using lower rates of interest, and benefiting

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

“Homes are bigger in addition to excellent quality than 2 decades ago.’’

Mr James said the most recent figures in 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.

“During the last year the median home price rose by 5.9 %, 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 per cent, outpacing a 66.7 percent lift home based prices.’’

In accordance with RP Data, the majority of Australia’s lowest priced suburbs will be in South Australia, Queensland or Tasmania.

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

The northern Adelaide suburb has a median property worth 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 cooling and heating. Picture: realestate.com.au Source: Supplied

Nearby Elizabeth North was the second lowest priced suburb that has a median property importance of $159,438. The suburb was established by 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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