Sold and
Leased Properties
> Find out where
Affordability back to the future
Posted on 2010-03-05
HOUSING affordability has quickly returned to pre-GFC levels. According to the Rismark December Quarter National Account, the average Australian home prices across all metro and non-metro regions (including all property types) are 4.6 times average disposable household incomes -- higher than the home price-to-income ratio in March 2003 of 4.4 times. In the December quarter, the average Australian home price was $428,298. The median home price was a marginally lower $400,000. Rismark managing director Christopher Joye said during the GFC, the average home price-to-income ratio fell to a low of 3.9 as dwelling prices declined while household incomes remained surprisingly stable (care of the government’s fiscal stimulus and a peak unemployment rate of just 5.8 %). However, the circa 11 % growth in dwelling prices since the start of 2009 has seen the ratio of prices to incomes restored back to around its recent average of 4.4 times. “It is notable how Australia’s home price growth has generally tracked disposable incomes. In contrast to claims that Australian home prices are 7-8 times incomes, Rismark’s index suggests that the true ratio across all regions and all dwelling types is nearly half this estimate. This in turn implies that Australian housing is not as expensive as is commonly presumed. “Given that there is around $1 trillion of mortgage debt outstanding in Australia, which is secured against approximately $3.5 trillion of residential property, the debt-to-assets ratio (or gearing) is actually less than 30%,” he added. Sorce: Property Review.com.au
DISCLAIMER: Every care has been taken to verify the accuracy of the information contained herein, but no warranty is given or implied and prospective purchasers/ tenants are advised to carry out their own investigations. Details herein do not constitute any representation by the vendor. Lessor or the agent and are expressly excluded from any contract.