Housing ‘more affordable than 1989’
28 June 2015 by News Desk
Property prices in Australia may have risen this year but when it comes to paying a mortgage, it was a lot harder 26 years ago.
In 1989, when interest rates were 17%, down under households were using almost 50% of their income to pay off their mortgage, compared with 35.9% today.
The best time to be paying off a mortgage was 1997, when just 24% of household income was needed to pay off a home loan. In 2004, 40.9% of household income was needed to pay a mortgage following a rise in interest rates, according to research from BIS Shrapnel.
In the past 12 months the price of an average house in Sydney has risen by 16% to $914,056. Property prices may be higher today but low interest rates mean a smaller proportion of household income goes towards paying the mortgage.
