Housing is as affordable because it would be a decade ago

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

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DESPITE what many buyers could imagine, new studies show Australian homes continue to be as affordable because they were about ten years ago.

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

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

“During the last decade disposable income per household has risen around 70 per cent while the

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

“Home values may be up, but so can be disposable incomes,’’ he explained.

Mr James said Australians had become richer after some time plus yesteryear decade, incomes had grown slightly faster than home values.

“But broadly in the decade little has changed with regards to home affordability - it offers gone

sideways,’’ he explained.

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

But he was quoted saying whenever you considered it coming from a purely financial ratio, things hadn't changed much.

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

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

“Homes are bigger in addition to good quality than two 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.

“In the last year the median home price rose by 5.9 percent, outpacing the 1.7 per cent lift in income per household,’’ Mr James said

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

As outlined by RP Data, the majority of Australia’s lowest priced suburbs come in South Australia, Queensland or Tasmania.

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

The northern Adelaide suburb has a median property valuation on $143,452.

Recent sales include, 21 Rollison Rd, Elizabeth Vale which sold for $195,000.

21Rollison Rd, Elizabeth Vale has four bedrooms and ducted air conditioning. Picture: realestate.com.au Source: Supplied

Nearby Elizabeth North was the 2nd lowest priced suburb using a median property value 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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