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Highlights
- Housing sector is booming in Australia as the demand for houses increase in the Country.
- House prices have been increasing much faster compared to the household incomes.
- Experts believe that House prices could increase by AU$102,000 by the end of the next calendar year as Australia lifts the border restrictions.
Housing sector is booming in Australia. Who doesn’t want to have a home of their own? However, this seems to be an arduous task in Australia in days to come, given the current rise in property prices. Recently published, ANZ CoreLogic Housing Affordability Report, has revealed that the time required to save a house deposit crossed a record 10.8 years Country-wide in Australia as prices rise at a rate 8.1% faster compared to the household income.
At present, Homebuyers on an average income need to use 39.3% of their household income to service a fresh mortgage after house prices increased 24.2% across the Country over the past year.
In Australia’s Sydney, Homebuyers are now taking 16.6 years to save a 20% deposit to purchase a house – also a record, following a 30.4 % growth in prices over the last 12 months.
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This suggests that new homeowners are required to spend 60.4% of their household income to pay back their mortgage, which is also a record high. Initial home buyers in Melbourne are no exceptions. With house values increasing 10.5 times quicker than income, those who want to buy homes have to spend over 50.8% of their household income to service their new home loan.
Eliza Owen, who heads research at CoreLogic Australia, stated that even with house price growth slowing, affordability continues to be a big challenge.
According to economists, what has exacerbated the situation is the pandemic and some government housing policies. The drastic rise in home prices over the past year, has not only made housing inaccessible but has also widened the gap between Have’s and Have nots. There are fears that the situation could deteriorate further in the year ahead as prices continue to move on an upward trend, although at a slower pace.
