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

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

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DESPITE what many buyers may think, new research has revealed Australian homes continue to be as affordable since they were a decade ago.

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

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

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

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

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

Mr James said Australians had become richer after a while and in days gone by decade, incomes had grown slightly faster than home values.

“But broadly above the decade little has changed when it comes to home affordability - it's gone

sideways,’’ he was quoted saying.

He said certainly people spent read more about homes together with bigger and better homes than they did a decade ago, in order that they thought housing was less affordable.

But he said whenever you viewed it from the purely financial ratio, things hadn't changed much.

“Certainly homes are less affordable than 19 years ago, that is 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 into your family house.

“Homes are bigger in addition to high quality than 20 years ago.’’

Mr James said the most up-to-date figures from 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.

“Within the last few 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 over the past decade, the average income per household has risen by 70.6 %, outpacing a 66.7 % lift in home prices.’’

As outlined by RP Data, most of Australia’s most affordable suburbs are in South Australia, Queensland or Tasmania.

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

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

Nearby Elizabeth North was the 2nd most economical suburb that has a median property valuation on $159,438. The suburb was established with 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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