Buying a home is as affordable now as it was thirty years ago, according the ANZ’s head of property research, Paul Braddick.
Mr Braddick told an Urban Development Institute of Australia function today that the relationship between median house prices and purchasing power was the same today as it was in the 1980s.
Despite describing the current housing market as “shaky”, Mr Braddick said the fundamentals behind the sector supported future growth, with the supply of housing well below underlying demand.
He said he was expecting a rebound in net overseas arrivals to lift demand for housing in WA.
Mr Braddick said public sentiment was currently against buying new homes, but the market fundamentals meant prices would not fall significantly.
“Sentiment may win the battle, but fundamentals will win the war,” Mr Braddick said.
UDIA chief executive Debra Goostrey warned the relatively affordable conditions might not last long, saying there was plenty of economic evidence to suggest that house prices in WA had bottomed out.
“With interest rates low and strong employment in Western Australia, coup0led with the underlying housing shortage, it’s a very good time to buy a house and set yourself up for capital growth in the coming years,” Ms Goostrey said.
“While we’re unlikely to see the sort of steep price rises we saw in 2005-07 for the foreseeable future, there is every indication that in 2012-13 we’ll witness house prices on the rise again.”