National Housing Affordability Declines

Both housing and rental affordability has declined, the Real Estate Institute of Australia’s Housing Affordability Report has found.

Although housing affordability improved in New South Wales and South Australia and remained steady in Western Australia and the Australian Capital Territory, it declined in Victoria, Queensland, Tasmania and the Northern Territory.

REIA President Adrian Kelly stated that housing affordability across Australia has declined, with the proportion of income required to meet loan repayments increasing to 34.7%, a rise of 0.1 percentage points over the quarter.

However, when compared to the same quarter of 2020 – housing affordability improved by 0.5 percentage points.

Meanwhile, rental affordability declined with the proportion of income required to meet median rents increasing to 24.4%, an increase of 0.4% over the March quarter and an increase of 0.7% over the past 12 months.

Mr Kelly added that the number of first home buyers had decreased by 4.4% over the quarter, but a rise of 62.6% over the last 12 months. Now, first home buyers make up 40.% of owner-occupier dwelling commitments.

“Over the March quarter, the average loan size grew to $506,340, an increase of 1.0% over the quarter and a rise of 2.6% over the past 12 months. During the quarter, the average loan size increased in all states and territories except New South Wales and South Australia. Over the past 12 months, the average loan size rose in all states and territories, ranging from 2.3% in Victoria to 10.8% in Tasmania,” Mr Kelly said.

For years, tech entrepreneur Asher Waldfogel and his wife, Helyn MacLean, dreamed of building a modern house in Palo Alto, Calif.

The couple, however, worried about clashing with the Mediterranean-style architecture typically associated with their neighborhood of Old Palo Alto.

So they tapped architect Steven Ehrlich to create a design that paid homage to its surroundings with stucco, mahogany and titanium zinc cladding. They spent $20 million over several years building the house, completed in 2005.

Designed for indoor-outdoor living, the house has matching mahogany paneling and limestone both inside and out. Arthur Sharif/Sotheby’s International Realty

The dining room is between an outdoor garden and the staircase. Arthur Sharif/Sotheby’s International Realty

Now looking to be closer to their adult daughter on the East Coast, they are putting the five-bedroom home on the market for $44 million—the most expensive listing in Palo Alto.

Waldfogel is an angel investor who co-founded Redback Networks, a telecommunications-equipment company. MacLean previously had a career in fundraising.

The kitchen and family room open to the garden and pool. Arthur Sharif/Sotheby’s International Realty

Cast alcoves and mahogany shelves house the couple’s books and ceramics. Arthur Sharif/Sotheby’s International Realty

The couple purchased the roughly 0.4-acre site for $7.1 million in 2000 and demolished a circa-1930s Spanish Colonial home. The house they built pinwheels around a central staircase. It has 7,900 square feet of livable space, with four distinct courtyards and a pool.

A key feature of the home is a cast-in-place concrete wall, or spine, that is two stories high and about 80 feet long. “There’s a little bit of controlled chaos in what comes out of the form,” unlike a perfectly uniform surface, Waldfogel said. “If you want that, you do it in plastic.”

Ehrlich said it took a few tries to get the concrete wall right. Arthur Sharif/Sotheby’s International Realty

‘It’s a really hard material to tame,’ Ehrlich said of concrete. Workers learned as they went, and Waldfogel and Helyn grew to appreciate the imperfect material. Arthur Sharif/Sotheby’s International Realty

A central staircase is housed in a glass tower. Arthur Sharif/Sotheby’s International Realty

Waldfogel said he and his wife are thinking about the next phase of life now that their daughter is grown, although they have not decided where they will move. They also have a home in Sun Valley, Idaho.

“Right now we’re just trying to emotionally let go and decide what to do next,” he said.

Arthur Sharif/Sotheby’s International Realty

Two wings of the house are connected by horizontal planes. Arthur Sharif/Sotheby’s International Realty

Palo Alto, an epicenter of venture capital and tech startups in Silicon Valley, is home to some of the country’s biggest tech titans. Sales volume and prices are rising, with a median sale price of $3.5 million for the three months ending in August, up 5.8% year-over-year, according to real-estate brokerage Redfin.

Arthur Sharif of Sotheby’s International Realty—San Francisco Brokerage has the listing.

National Housing Affordability Declines

However, New South Wales and South Australia saw improvements in affordability in the quarter.

A five-bedroom Palo Alto home designed by Steven Ehrlich is listed for $44 million, making it the city’s most expensive listing. Built around a dramatic concrete spine, the home features four courtyards and a pool.