Latest data shows that property on the coast is the most affordable it’s been in two decades, almost as if you were buying in 1999.
The latest Housing Industry Association figures for property on the Gold Coast found it was the most affordable as 1999 taking into account several key factors.
Property price falls, wage growth and record-low interest rates were combining to boost the property market’s affordability back to 1999 standards, the HIA’s June quarter affordability index report stated.
“For a homebuyer with an average income purchasing a median priced dwelling (assuming a 10 per cent deposit), mortgage repayments will consume the smallest proportion of their earnings since 1999,” HIA senior economist Geordan Murray said.
The interest rate, which hit an all-time low of 1 per cent recently, has had the biggest impact, according to Mr Murray.
“The main reason the HIA affordability index today is comparable with the level in 1999, despite house prices rising significantly faster than incomes, is that (average mortgage) interest rates are 4.6 per cent today compared with 6.7 per cent in 1999,” he said.
“Average earnings have increased by 113 per cent over the 20 years to 2019, while the median home price has increased by 228 per cent but the lower interest rates have kept the cost of servicing a loan the same.”
Australia’s median dwelling price was just $190,978 in 1999 compared to $538,837 today and the average full time wage has increased from $39,703 to $84,611 today, according to the report.
Mr Murray said the correction to the national housing market along with the positive buying conditions would mean the Gold Coast would continue to thrive.
“The reduction in interest rates was a significant factor behind the improvements in affordability in Queensland,” he said.
“The lower borrowing rates will benefit households on the Gold Coast just as they are in other parts of the country.”
REIQ Gold Coast zone chairman Andrew Henderson agreed that the city was experiencing some of the best buying conditions in decades.
“If you’re looking to purchase property, taking those indicators into account should give you a high confidence level that now is a good time to secure your home or investment,” he said.
“With the interest rates at low levels it gives people the opportunity to purchase their dream property sooner.
“Anyone waiting on the sidelines for property prices to drop, there’s no point waiting any longer.”