Australian housing has become increasingly more expensive since the mid 1990s once the recession we had to have washed through the economy and the run of economic growth that is now in its 23rd year became entrenched.
The impact of this on affordability was starkly highlighted yesterday by Cameron Kusher from RP Data in an excellent post.
Kusher neatly highlighted why the proportion of first home owners is at an all-time low when he said:
The escalation in the cost of housing is forcing households to spend more to purchase a home; subsequently the deposit is also higher, forcing many first home buyers to wait until later in life to purchase a home or consider a more affordable location/housing type than what they would have previously accepted.
He said in the 12 months to April 2014 the $400,000 – $600,000 range at 34.5% is the top seller with 34.5% of all sales while the $200,000 – $400,000 came in second with 26.8%.
But in a telling statistic, Kusher also noted that “Over the past 12 months there has been almost as many capital city home sales over $2 million than there have been below $200,000. Clearly low income earners are finding it increasingly difficult to purchase homes in capital cities.“