Housing remains as affordable mainly because it was obviously a decade ago

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

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DESPITE what many buyers could imagine, new research has shown 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 about four times household disposable income.

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

“During 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 explained.

“Home prices could possibly be up, but so can be disposable incomes,’’ he was quoted saying.

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

“But broadly above the decade little has changed regarding home affordability - they have gone

sideways,’’ he said.

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

But he said if you viewed it at a purely financial ratio, things had not changed much.

“Certainly homes are less affordable than 19 years ago, but that is not because income growth have been sluggish, but because wealthier Australians, using lower interest levels, and benefiting

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

“Homes are bigger and of higher quality than 20 years ago.’’

Mr James said the most recent figures through 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.

“Within the last few year the median home price rose by 5.9 %, outpacing the 1.7 % lift in income per household,’’ Mr James said

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

As outlined by RP Data, the majority of Australia’s most inexpensive 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 features a median property importance 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 your second most affordable suburb using a median property valuation on $159,438. The suburb was established with 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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