Housing is as affordable since it was 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 remain as affordable as they were ten years ago.

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

He was quoted saying this ratio was broadly unchanged from the decade ago.

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

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

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

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

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

sideways,’’ he said.

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

But he was quoted saying once you considered it coming from a purely financial ratio, things had not changed much.

“Certainly homes are less affordable than 19 years ago, but that's not because income growth continues to be sluggish, but because wealthier Australians, using lower rates, and benefiting

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

“Homes are bigger as well as good quality than twenty years ago.’’

Mr James said the modern figures on the 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.

“Over the past 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 over the past decade, the typical income per household has risen by 70.6 per-cent, outpacing a 66.7 % lift in home prices.’’

Based on RP Data, most of Australia’s most affordable suburbs have been in South Australia, Queensland or Tasmania.

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

The northern Adelaide suburb incorporates 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 cooling and heating. Picture: realestate.com.au Source: Supplied

Nearby Elizabeth North was your second least expensive suburb with a median property price of $159,438. The suburb was established because of 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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