New housing market data shows bad news for homebuyers on the average wage
In the past fortnight, the ABS has had some good news and bad news about housing. First. The good news. The total value of all Australian dwellings increased in the past quarter by $209 billion to $10.7 trillion. Of course, it's only good news if you've got a little piece of that $10 trillion, otherwise it's bad news. The other bad news is that the average new housing loan for owner occupiers is a record high 625,791 dollars. Now, that's exactly 80% of the median Australian house price of $785,556, which is the most you can borrow for a house. And that makes sense. It'll take 14 years to save a 20% deposit for that average place. If you're on the average wage and can save 15% of your salary, that is 20 years ago it was six years and that was kind of doable. But 14? Forget it, unless you've got parents who can and will help you. But then you've got a service that average loan and unless you earn more than the average wage, you can't. That is, Australia is now in a situation where the average family can't afford. An average house, $6500 that's the average monthly salary after tax following the tax cuts that kick in on July the 1st $4353 That's the monthly repayments on that average mortgage, $500 That's what you got left per week if you're on your own. If there's two of you working full time, you're OK, but better not have two kids, $5000 that's roughly the cost of childcare. Which is more than the mortgage, $873. And that's how much you have left per week for utilities, food and medical and everything else. It's not enough. Home ownership is no longer possible in Australia unless you earn much more than the average wage.