New research by RP data suggests that Australian property prices today are roughly where they were five years ago. This is an indication of a clear improvement in home affordability.
International debt problems and declining consumer confidence has contributed to property prices dropping over the past 12 months. Furthermore, up until a few weeks ago the threat of rates going up further has kept many people away from property investment.
Today, the Australian property market represents very strong value and should result in investors slowly making a return.
According to RP Data, the national average house price is almost exactly the same as it was in 2006, while incomes continue to increase annually.
The average Australian home now costs $417,500, which is $66,000 less than the average house price from two years ago and pretty much the same as five years ago.
On the income side, median household income in Australia continues to rise – at an average annual rate of over 7 per cent since 2006. Median household income in Australia now sits at just under $77,000, as compared to just over $54,000 in 2006.
Buying a home of your own has always been a dream for most Aussies, and paying off your home loan quickly is something most Australians strive for. It got much harder towards the end of 2008, but since the GFC home affordability has improved, due to lower property prices and continued income growth for most Australians.
“The average household is now bringing in around $6,000 more than they were two years ago and almost $23,000 more than in 2006.”