Homebuyers need 7.7 years of hard saving
- The Real Estate Institute of Australia said the average new home loan has now ballooned to $590,482.
- Someone able to save at least $1,000 a month will need 7 years and 7 months (2,812 days) of savings to achieve the recommended 20% deposit.
- First-time buyers made up 34.1% of all new owner-occupier home commitments in the December quarter.
The average new home loan in Australia is nearing $600,000 with the country’s housing market now labelled too hot for the peak real estate industry organisation.
The Real Estate Institute of Australia (REIA) launched its latest housing affordability report which shows that the average home loan has ballooned to $590,482 in the year to December 2021 at an annual growth of 17.7%.
That uptick marks the single biggest annual increase in two decades.
According to CommBank, ideally, the minimum required deposit for a home loan is 10%, however prospective buyers should aim for 20% if possible.
In order to borrow 80% of the home’s value, buyers will need a deposit of $118,096 for an average home loan. For someone who is able to save at least $1,000 a month it would take them at least seven years and seven months of saving.
Remember when, in 2015, Malcolm Turnbull became 29th prime minister ousting Tony Abbott in a party-room spill? Or When Johnny Depp’s wife Amber Heard brought their pet dogs Pistol and Boo into Australia illegally and then Agriculture Minister Barnaby Joyce said they should “bugger off” to LA.
If prospective homebuyers had started saving that $1000 a month from all the way back then, they might be close at some time this year in having that requisite $118,096.
According to REIA, first-time buyers made up 34.1% of all new owner-occupier home commitments in the December quarter, marking a drop of 7.8% through the year.
On average, home loan repayments have ballooned to 37% of a borrower’s income, the REIA report said.
“If you’re borrowing more than 80% of the property value, you’ll need to take out Lenders’ Mortgage Insurance or Low Deposit Premium,” CommBank’s website said.
Rising interest rates are expected to take some of the heat out of the market, but with today’s statement from the REIA, it’s clear the real estate industry is banking on government support to get more Australians into home.
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