Housing continues to be as affordable as it was a decade ago

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

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DESPITE what many buyers might imagine, new research shows Australian homes continue to be as affordable when they were a decade ago.

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

He said this ratio was broadly unchanged from the decade ago.

“Within the last decade disposable income per household has risen around 70 percent while

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

“Home values may be up, but so are disposable incomes,’’ he said.

Mr James said Australians had become richer after a while and in the last decade, incomes had grown slightly faster than home prices.

“But broadly on the decade little has changed regarding home affordability - it offers gone

sideways,’’ he explained.

He said certainly people spent read 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 looked at it coming from a purely financial ratio, things had not changed much.

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

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

“Homes are bigger and also excellent quality than 19 years ago.’’

Mr James said the most up-to-date figures from your 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 per cent lift in income per household,’’ Mr James said

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

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

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

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

Nearby Elizabeth North was the second most inexpensive suburb having a median property value of $159,438. The suburb was established because of 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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