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Mortgages soak up 40% of first home buyers' pay

First home buyers are being forced to fork out a record 40.6 per cent of average incomes to pay for a typical mortgage, as spiralling home prices make gaining a foothold in the city's booming property market more difficult than ever.

The problem is not limited to Sydney. The report's national housing affordability index also plunged 9 per cent in the June quarter to a

13-year low. Median first home buyer house prices jumped 12.2 per cent across Australia to $291,300.

First home buyers nationally now have to put aside 25.3 per cent of the average household income to meet repayments - approaching the all-time high of 28 per cent reached in late 1989 when home loan rates were at record highs.

The shadow treasurer, Mark Latham, said yesterday: "Someone on a nurse's wage cannot afford to buy a three-bedroom home in any part of metropolitan Sydney. When it gets to the point when the people who serve the community can't afford to live in the community, it's an issue for everyone."

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It seems our Aussie cousins are experiencing a similar scenario to that in the UK.

Robin

Reply to
Robin Smith
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Yeh? Who is forcing them to pay anything? I'm not. They coudl always rent a place and if they think that it's bad now, what are they going to be moaning like when interest rates inevitably rise? HINT: Interest rates can only really rise in the medium term.

Anyway, I have no sympathy. Mortgage payments cost me 50% of my wage in the 1970s, and 70% in the 1980s.

Reply to
Steve Firth

Says who? You? For someone who was paying 70% of his wages in mortgage payments you are hardly a convincing economic adviser are you. Complete groundless waffle by an armchair expert who knows nowt.

Reply to
half_pint

Good point. I think Monty Python did a skit where people setup their living rooms & baths etc, in the street (good views, free skylight, no hassle of climbing up and down stairs, easy to take the litter out, etc).

Now this by-line I like. I think that I could even bring myself to watch TV if this were part of the selection.

Stephen.

Reply to
System Prompt

Anyone with more than half a brain, this excludes you. Interest rates are presently at a sixty-year low. Where do you think they will go in the medium term? Any reduction must perforce be small yet the possibility for increases is endless.

Do you remember the booms and busts of the 1970s and 1980s? You will find that at some point most people with repayment mortgages were paying immense proportions of their salaries as mortgage rates spiralled ever upwards. Those of us who started the period with modest mortgages survived, those who had borrowed beyomd their means found out what it was like o have a lender foreclose and also the meaning of the term negative equity.

That would sum up your content-free post rather well.

Reply to
Steve Firth

What's the "medium term"? 10 years? 10 years ago Japan's interest rates were similar to ours now, and there's only one direction they've moved since.

Reply to
Andy Pandy

25 years ago, we were in 1978. Did anyone in 1978 have any idea whatsoever that the economy would be the way it is now?

How can we possibly know what it will be like in 2028?

Reply to
Jonathan Bryce

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