Housing remains as affordable because it became 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 may think, new research has shown Australian homes will still be as affordable since they were ten years ago.

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

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

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

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

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

Mr James said Australians had become richer after a while and the past decade, incomes had grown slightly faster than home prices.

“But broadly on the decade little has changed in terms of home affordability - it's got gone

sideways,’’ he explained.

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

But he was quoted saying whenever you viewed 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 has been 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 the family house.

“Homes are bigger and also top quality than 20 years ago.’’

Mr James said the modern figures from 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 within the last decade, the average income per household has risen by 70.6 per-cent, outpacing a 66.7 % lift in home prices.’’

In line with RP Data, lots of Australia’s most inexpensive suburbs are in South Australia, Queensland or Tasmania.

It found Elizabeth Vale, in Adelaide was Australia’s least expensive 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 next lowest priced suburb that has a median property importance 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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