Media headlines bombard us with the news of high property prices and the nation’s financial stress, but a new report from CoreLogic suggests it may be easier to purchase property than we think. CoreLogic’s new Property Pulse report claims it’s easier to buy a home in most parts of the country than it was a decade ago.
CoreLogic explains that housing costs have increased in line with increases in annual earnings. While we’re paying an average of $516,710 for property, up from $382,650 ten years ago, annual household incomes have jumped from $59,020 to $79,872. However, record low mortgage rates are making it easier than 10 years ago to manage repayments. Over the last 10 years we’ve seen mortgage rates drop by a full percentage point from 5.1 percent to 4.1 percent.
Of course, just because property is more accessible on average, that doesn’t mean everyone has it easy. In Sydney, Melbourne, and Hobart, property prices have risen sharply. In contrast, people looking to buy in Adelaide, Canberra, and regional parts of Northern Territory, Western Australia and Queensland will find homes are surprisingly affordable.
"While the national reading is the same as it was ten years ago, five of the eight capital cities and four of the seven non-capital city regions have recorded an improvement in the ratio of dwelling values to household incomes," Tim Lawless, the head of research at CoreLogic, wrote in The Real Estate Conversation.
He suggested several strategies could help improve the supply of suitable properties and demand from investors and owner-occupiers.
"On the supply side, ensuring infrastructure programs, land release and town planning policies are keeping pace with population growth is important. On the demand side, population growth drives housing demand, as do stimulus measures such as first home buyer grants and tax concessions."
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