Housing remains to be as affordable since 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 least expensive suburbs.

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DESPITE what many buyers may think, new studies show Australian homes remain as affordable when they were about ten years ago.

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

He explained this ratio was broadly unchanged at a decade ago.

“Within the last decade disposable income per household has risen around 70 per cent as the

average home price has lifted around 67 per-cent,’’ he said.

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

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

“But broadly over the decade little has changed with regards to home affordability - it's got gone

sideways,’’ he said.

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

But he was quoted saying if you looked over it at a purely financial ratio, things hadn't changed much.

“Certainly homes are less affordable than two decades ago, but that is not because income growth continues to be sluggish, but because wealthier Australians, using lower mortgage rates, and benefiting

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

“Homes are bigger as well as good quality than 2 decades ago.’’

Mr James said the newest 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.

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

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

According to RP Data, the majority of Australia’s least expensive suburbs have been in South Australia, Queensland or Tasmania.

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

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

Nearby Elizabeth North was the 2nd most inexpensive suburb using a median property worth 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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