Home debt nears danger zone
Home loans have more than doubled in size over the past five years, with the average loan now standing at $179,631 – 61 per cent up on 1998's average of $111,204, the AMP/Real Estate Institute of Australia's home loan affordability report reveals. The larger loans have been driven by low interest rates, spiralling property prices and the Federal Government's first homeowners' grant.
But the rise in mortgages has not been matched by a rise in income, economists and financial counsellors say, and more than 25 per cent of household income is now spent on home loan repayments. This is dangerously close to the 30 per cent limit which lenders use as the level indicating financial strain for households.
New South Wales is the least affordable state in which to buy a house, followed by Victoria and Queensland.