Housing is as affordable because it became a decade ago

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

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DESPITE what many buyers may believe, new studies show Australian homes continue to be as affordable when they were a decade 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 from the decade ago.

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

average home price has lifted around 67 per-cent,’’ he was quoted saying.

“Home prices might be up, but so might be disposable incomes,’’ he was quoted saying.

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

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

sideways,’’ he explained.

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

But he said when you viewed it from the purely financial ratio, things had not changed much.

“Certainly homes are less affordable than 20 years ago, but that is not because income growth continues to be sluggish, but because wealthier Australians, using lower interest levels, and benefiting

from less costly basic necessities like food, clothing and transport, have channelled extra dollars to the family home.

“Homes are bigger and also high quality than 2 decades ago.’’

Mr James said the latest figures from your RP Data/Rismark Home value index showed the median cost 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 percent, outpacing the 1.7 % lift in income per household,’’ Mr James said

“But interestingly within the last few decade, the typical income per household has risen by 70.6 percent, outpacing a 66.7 % lift in home prices.’’

As outlined by RP Data, the majority of Australia’s most economical suburbs will be in South Australia, Queensland or Tasmania.

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

The northern Adelaide suburb features 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 hvac. Picture: realestate.com.au Source: Supplied

Nearby Elizabeth North was the next lowest priced suburb having a median property valuation on $159,438. The suburb was established through 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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