Housing remains to be as affordable as it would have been a decade ago

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

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DESPITE what many buyers could imagine, new research shows Australian homes continue to be as affordable while they were about ten years ago.

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

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

“Within the last few decade disposable income per household has risen around 70 per cent even though the

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

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

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

“But broadly on the decade little has changed in terms of home affordability - they have gone

sideways,’’ he said.

He said certainly people spent more on homes and had bigger and better homes than they did a decade ago, so they thought housing was less affordable.

But he said when you looked at it from a purely financial ratio, things had not changed much.

“Certainly homes are less affordable than 20 years ago, but that's not because income growth has been sluggish, but because wealthier Australians, using lower interest rates, and benefiting

from less costly basic necessities like food, clothing and transport, have channelled extra dollars into your home.

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

Mr James said the modern figures on 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.

“Over the past 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 within the last few decade, the normal 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 most economical suburbs come in South Australia, Queensland or Tasmania.

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

The northern Adelaide suburb carries 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 air conditioning. Picture: realestate.com.au Source: Supplied

Nearby Elizabeth North was the second least expensive suburb using a median property value of $159,438. The suburb was established through 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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