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Buying a home in Australia is twice as difficult as it was 30 years ago, but there is a “silver lining”, according to comparison website finder.com.au.
An analysis of the cost of living indicates that today’s average mortgage of $334,000 is more than four times the average income of $79,000, while in 1984 the average mortgage, of $37,542, was less than twice the average income, of $19,000.
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“The average mortgage size is almost eight times bigger than it was in 1984; however, average salaries have not kept up this pace, increasing by 316 per cent,” Finder spokesperson Michelle Hutchison said. “In fact, in 1984, the proportion of repayments to income was 23 per cent and now it’s 29 per cent.”
The analysis also showed that average monthly mortgage repayments are $1,896 compared to the $372 of 30 years ago (based on average standard variable rates and loan sizes).
Meanwhile, today’s average property value is approximately $580,000, compared to $66,042 in 1984.
Despite the tougher conditions, many people are still more attracted to buying a home, with the research showing that there are almost four times as many households with a mortgage than there were 30 years ago.
“The good news is that history shows property is a great investment,” Ms Hutchison said. “If this trend continues, homeowners can expect the average property of $580,000 to be worth $4.6 million in 30 years’ time.”
Ms Hutchison also noted that with the likelihood of another cash rate cut, now is the ideal time to purchase a property.
“It’s a good time to buy property before prices rise further, as the finder.com.au Reserve Bank Survey shows that another cash rate is on the cards within the next few months, which is likely to fuel property prices,” she said.
