I do not think that this headline will be “news” to many but thought that those wishing to understand the housing market might find this information helpful to know and understand…
Due to increasing house prices and interest rates, the proportion of the average family income required to pay the average loan increased from 30 per cent a year ago to 36.1 per cent in the December quarter. The main reason for this is that incomes have increased at a slower rate than loan repayments have.
This will not surprise anyone with a mortgage as they have seen the bank standard variable rate increase by almost 1% over this time. That has translated to an average of $470 per month to service an average loan compared to an increase in median family income of $191 over the same time.
The average home loan was $313,808 compared to $287,331 a year ago, so not only have interest rates increased but so, too, has the size of loans. This is because over the same time house prices have also increased strongly.
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