Despite COVID hurdles, the great Australian dream of property ownership appears alive and well with ABS figures revealing two thirds of households own their home outright or with a mortgage.

Breaking down this figure, the ABS revealed households that own a home with a mortgage have increased from 26.2% in 1996 to 35% in 2021, yet over the past 25 years the ABS noted the number of homes owned with a mortgage has increased by 96.8%.

AMP Chief Economist Dr Shane Oliver said this surge in household debt that has accompanied surging home prices over the last 30 years is Australia's 'Achilles Heel'.

"Each successive generation since the Baby Boomers have been progressively more relaxed about taking on debt," Dr Oliver said. 

"It’s become somewhat self-feeding in that rising debt has enabled home buyers to pay more for homes which in turn has necessitated rising debt levels to get into the property market."

While average household debt for each Australian has risen from $11,779 in 1990 to $107,318 today, Mr Oliver said the average wealth per person has surged from $87,489 to $655,894. 

Debt & Wealth Relative to Income.JPG

The growth of wealth and strong savings buffers, coupled with a historically low rate environment, has seen monthly mortgage repayments remain relatively stable over the past five years according to PRD Chief Economist Dr Asti Mardiasmo. 

"For renters however, monthly rental repayments based on a four-week per month calculation, have all increased over the past five years," Dr Mardiasmo told Savings.com.au.

"Of course there is a good chance that these figures will be changing very soon, with the increases in cash rate impacting mortgage payments, however that said the availability of rentals continues to decline due to construction challenges and investors exiting the market as associated costs to keeping the investment property makes it financially non-viable."

"Therefore for monthly mortgage repayments to 'catch up' so to speak we would need to see a large increase to the monthly mortgage repayments."

Coastal suburbs hardest hit

There does appear to be one downside to living by the beach, with Dr Mardiasmo noting those living in Noosa and Sunshine Coast are facing the highest increase in housing costs.

"Monthly mortgage repayments have grown 8.3% in Noosa and 6.4% on the Sunshine Coast over the past five years, while monthly rental payments have increased 17.5% in Noosa and 18.9% on the Sunshine Coast over the past five years," she said. 

On the other side of the coin, Dr Mardiasmo says Brisbane and Logan City council renters are experiencing the lowest increase in monthly rental repayments at 4.6% and 4.5% respectively over the past five years.

Meanwhile Lockyer Valley and Moreton Bay regional council resisdents have lucked-out in terms of monthly mortgage repayments - falling -1.1% and -0.2% respectively over the past five years.

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LenderHome LoanInterest Rate Comparison Rate* Monthly Repayment Repayment type Rate Type Offset Redraw Ongoing Fees Upfront Fees Max LVR Lump Sum Repayment Additional Repayments Split Loan Option TagsFeaturesLinkComparePromoted ProductDisclosure
6.04% p.a.
6.06% p.a.
$3,011
Principal & Interest
Variable
$0
$530
90%
4.6 Star Customer Ratings
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Quick and easy online application process.
Disclosure
5.99% p.a.
5.90% p.a.
$2,995
Principal & Interest
Variable
$0
$0
80%
Apply in minutes
  • No application or ongoing fees. Annual rate discount
  • Unlimited redraws & additional repayments. LVR <80%
  • A low-rate variable home loan from a 100% online lender. Backed by the Commonwealth Bank.
 Disclosure
6.09% p.a.
6.11% p.a.
$3,027
Principal & Interest
Variable
$0
$250
60%
  • No annual fees – None!
  • Get fast pre-approval
  • Unlimited additional repayments free of charge
 Disclosure
5.69% p.a.
6.16% p.a.
$2,899
Principal & Interest
Fixed
$0
$530
90%
  • Available for purchase or refinance, min 10% deposit needed to qualify.
  • No application, ongoing monthly or annual fees.
  • Flexibility to split your loan with both fixed and variable rates
 Disclosure
Important Information and Comparison Rate Warning

Base criteria of: a $400,000 loan amount, variable, fixed, principal and interest (P&I) home loans with an LVR (loan-to-value) ratio of at least 80%. However, the ‘Compare Home Loans’ table allows for calculations to be made on variables as selected and input by the user. Some products will be marked as promoted, featured or sponsored and may appear prominently in the tables regardless of their attributes. All products will list the LVR with the product and rate which are clearly published on the product provider’s website. Monthly repayments, once the base criteria are altered by the user, will be based on the selected products’ advertised rates and determined by the loan amount, repayment type, loan term and LVR as input by the user/you. *The Comparison rate is based on a $150,000 loan over 25 years. Warning: this comparison rate is true only for this example and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate. Rates correct as of . View disclaimer.

Important Information and Comparison Rate Warning

Image by Tom Rumble via Unsplash



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