With so much talk of increasing house prices and affordability – RP Data and Rismark are challenging this belief.  From last week’s research, they claim that housing affordability has not declined since 2003.  According to Rismark’s CEO, Christopher Joye, “There is an uninformed perception that houses are much more expensive now, compared to our household incomes, than they ever have been before.”

“But that is not correct, affordability in the housing market is not deteriorating rapidly, average house prices are not seven to eight times household incomes as is often quoted,” he says

According to their research, in 1993, the average first home cost between two and three times the average household incomes.  Ten years later the ratio increased to only about four times – which has remained steady in the last seven years.

While this is not being disputed by Senior Economist, Ben Phillips from the Housing Industry Association – he does however have a different take on this.  He claims that “House prices have about doubled in recent years and incomes simply have not kept up, especially for first home buyers.”

The Housing Industry Association research has shown that about two thirds of first home buyers are under 35, which in 2001 was more than three quarters.  Phillips says, “First home buyers need a much higher deposit and they need to be able to afford much higher repayments than in the past,” confirming that affordability is getting worse.

Tags: affordability, Budget, First Home Buyers, Home Loan, Home Loans, Invest, Move House, Property

This entry was posted on Thursday, January 28th, 2010 at 4:56 pm and is filed under Buying to Invest, First Time Buyers, Moving House. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.