In a sign that the economy is strengthening, housing affordability has returned to its pre-GFC levels.
According to Rismark’s December Quarter National Accounts report, the average Australian home price across all metro and non-metro regions is 4.6 times the average Australian disposable income.
During the GFC, Australia’s average home price-to-income ratio fell to a low of 3.9 as dwelling prices declined while household incomes remained surprisingly stable.
Rismark’s managing director Christopher Joye said the 11 per cent growth in dwelling prices since the start of 2009 has seen the ratio of prices to income restored to the long term average of approximately 4.4 per cent.
“Recent analysis conducted by the Reserve Bank of Australia (RBA) has shown that despite Australia’s internationally high mortgage rates, debt-servicing is strong: Australia’s mortgage default rate is nearly one-tenth and one-quarter of US and UK levels, respectively,” Mr Joye said.
“Based on the RBA’s analysis at the end of last year, less than 40,000 of the circa 5 million borrowers were behind by 90 days or more on their repayments.”
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