![]() ![]() The Australian Prudential Regulation Authority, the banking regulator, is concerned when an individual or a couple owes the bank more than six times their salary. Someone on an average, full-time salary of $94,000 paying off a $973,846 loan would now have a very dangerous debt-to-income ratio of 10.4. In 2023, Sydney's median house price of is $1,217,308 and a borrower needs a 20 per cent deposit of $243,461. The 20 per cent deposit of $34,170 was barely more than a year's wage and someone paying off a $136,680 mortgage had a manageable debt-to-income ratio of 5.1. In November 1989, when interbank interest rates hit 18.2 per cent, Sydney's median house price was $170,850 back when $26,874 was Australia's average, full-time salary. The Reserve Bank's 3.6 per cent cash rate is significantly less than the 17.5 per cent level of January 1990 when a target cash rate was introduced.īut house prices are significantly more expensive compared with incomes. 'Younger generations were far more likely to report financial difficulty in managing their mortgage repayment.' 'Increases in housing costs are having a higher impact on Australian households than any other metric,' the Finder report said. The Reserve Bank of Australia's 10 consecutive interest rate rises since May are biting with Finder's monthly Cost of Living report showing 31 per cent of Generation Z borrowers, born from 1995 onwards, missing a mortgage repayment during the past six months. It comes after a survey found that one in three young Australians are missing their mortgage repayments. 'So hopefully that puts that myth aside.' 'And with rates set to go higher, it has never been tougher to meet a mortgage,' he said. Koch said existing home loan rates were causing 'the same pain' as those trying to buy a home in the late 1980s, when baby boomers were their thirties and forties. This is above the banking regulator's mortgage stress threshold of 'six', proving the scourge of unaffordable housing extends well beyond Sydney and Melbourne. 'In 2023, it's eight times the average Aussie salary.'Īustralia's median house price of $753,670, based on CoreLogic data, is eight times an average, full-time salary of $94,000.īut with a 20 per cent mortgage deposit of $150,734, that debt-to-income ratio is 6.4. 'So in the 80s, the price of a house was four times the average person's income,' he said. The Sunrise host and financial guru explained how in the 1980s the average salary was $19,000, compared with $94,000 in 2023. ![]()
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