Housing affordability at worst level in 30 years, says PropTrack
Housing affordability in Australia has hit its worst level in three decades, according to PropTrack.
The PropTrack Housing Affordability Index reveals that households of all income levels could afford the smallest share of homes since the index’s inception in 1995, with those in New South Wales, Tasmania, and Victoria up against the toughest affordability conditions in the country.
The data presents a worrying statistic: a household earning a median income of $105,000 could only afford to purchase a mere 13% of the homes sold in the last 12 months.
As both home loan interest rates and house prices leapfrog towards unaffordability, it’s easy to get lost in the overwhelming sense of housing-FOMO that rears its ugly head every time you switch on the six o’clock news.
So what can you do if you’re looking to buy in the near future?
Look to buy in less competitive property areas
It might seem like a painfully obvious piece of advice, but choosing an area that less people want to live in can sometimes equate to lower prices.
While it might not be your ideal suburb or region, finding a home in an area that’s a short train trip, or quick drive, away from where you’d prefer to live is a concession you can make that may get you closer to your dream of homeownership sooner.
Check government home owners grants or schemes
Australian states and territories often run some sort of First Home Owners Grant (FHOG), with some even offering stamp duty exemptions. These grants are usually only available to those getting their first home loan and come with eligibility requirements to be aware of.
Various government grants which you may be entitled to include:
- First Home Super Saver Scheme
- First Home Buyers Assistance Scheme (NSW)
- First Home Buyer Duty Exemption, Concession or Reduction (VIC)
- Home Buyer Concession Scheme (ACT)
- First Home Transfer Duty Concession (QLD)
- First Home Vacant Land Concession (QLD)
- First Home Builder Boost (Tasmania)
- BuildBonus Grant (Northern Territory)
- Territory Home Owner Discount (Northern Territory)
- First Home Owner Rate of Duty (WA).
Buy an investment property interstate
If you’re in NSW, Tasmania, or Victoria, and can’t afford to purchase your own place in your state, then consider taking the long route to homeownership by purchasing an investment property in a cheaper state.
Western Australia, Queensland, and South Australia all rank higher in affordability, according to PropTrack. So, it may be worth considering using your deposit to purchase an investment property first, which you can later use as equity to purchase your own home.
This of course hinges on the way the market moves in each state or territory, so it’s important you do your research before heading down this route.
It’s also unlikely that you’ll receive any FHOGs, as those are primarily for owner-occupiers, not investors.
Go halves with a sibling, partner or friend
If you’re single, or don’t have enough of an income to buy a place on your own, consider teaming up with a sibling, friend, your partner, or even with your parents.
In the same way that two heads are better than one, two incomes are looked upon favourably by lenders when you apply for a home loan, and could lessen the financial strain of regular costs, like your mortgage repayments – not to mention teaming up on the deposit.
By getting more money into the mix, you’ll theoretically be able to open up more of the housing market by increasing your combined income.
Just make sure you iron out the details of each party’s rights and responsibilities when it comes to jointly owning a property, especially when buying a place with friends.
Use the time to save for a home deposit
If you’ve crunched the numbers using a mortgage repayments calculator and found your monthly income won’t stack up, or you just can’t find any places under budget, then it might be time to go back to the drawing-board and save up a larger deposit.
If you’re wondering how to save for a home deposit, there are a few ways to get yourself on track. These could include:
- Assessing your spending to find expenses you can slash
- Creating a budget to get your savings under control
- Getting your debts under control
- Finding a high-interest savings account to boost your nest egg.
Compare home loans
If you’ve saved up your deposit and are ready to pounce on a property, then your next port of call is going to be a home loan comparison.
Comparing home loans is a good way to find interest rates that fit your budget, or products with features that you want, like offset accounts or redraw facilities.
Mozo makes comparing some of the best home loans in Australia simple, with at-a-glance interest rates, estimated monthly repayments, and a quick overview of each product's features.
Take a look at some of the featured products in the Mozo database below.
Home loan comparisons on Mozo - last updated 20 May 2024
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Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Owner Occupier, LVR <80%
interest rate
comparison rate
Initial monthly repayment5.99% p.a. variable5.90% p.a.Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
CompareCompareUnloan Variable
Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for borrowers. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- interest rate
- 5.99% p.a. variable
- comparison rate
- 5.90% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
-
Basic Home Loan
Fixed, Owner Occupier, Principal & Interest, LVR<70%
interest rate
comparison rate
Initial monthly repayment6.25% p.a.
fixed 3 years6.20% p.a.No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.
CompareCompareBasic Home Loan
No upfront or ongoing fees. Free extra repayments and redraw facility. Option to earn Qantas points. Min 30% deposit required. Borrow up to $750,000.
- interest rate
- 6.25% p.a.
fixed 3 years
- comparison rate
- 6.20% p.a.
- interest rate
- 6.25% p.a.
fixed 3 years
- comparison rate
- 6.20% p.a.
- Upfront fees
- $350
- Ongoing fees
- $0.00
- Discharge Fee
- $400.00
- Extra repayments
- yes - up to $10,000 p.a.
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 70.00%
- minimum borrowing amount
- $150,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Macquarie Basic Home Loan
-
Discounted Home Value Loan
Owner Occupier, Principal & Interest, LVR 70-80%
interest rate
comparison rate
Initial monthly repayment6.09% p.a. variable6.09% p.a.Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).
CompareCompareDiscounted Home Value Loan
Enjoy competitive rates for owner occupiers. Enjoy unlimited free extra repayments. Flexibility to redraw additional payments for free. No ongoing monthly service fee. Settlement fee waived on new borrowings from $50,000 (T&Cs apply).
- interest rate
- 6.09% p.a. variable
- comparison rate
- 6.09% p.a.
- interest rate
- 6.09% p.a. variable
- comparison rate
- 6.09% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $300.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $50,000
- maximum borrowing amount
- $15,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the HSBC Discounted Home Value Loan
-
Featured Product
Mozo experts choice awards won:
- Low Cost Home Loan - 2024
Unloan Variable
Investment, LVR <80%
interest rate
comparison rate
Initial monthly repayment6.29% p.a. variable6.20% p.a.Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
CompareCompareUnloan Variable
Built by CommBank, the Unloan is the first home loan with an increasing discount (conditions apply) for investors. No application or banking fees. No monthly account keeping or early exit fees. Apply online in minutes.
- interest rate
- 6.29% p.a. variable
- comparison rate
- 6.20% p.a.
- interest rate
- 6.29% p.a. variable
- comparison rate
- 6.20% p.a.
- Upfront fees
- $0
- Ongoing fees
- $0.00
- Discharge Fee
- $0.00
- Extra repayments
- yes - free
- Redraw facility
- yes - free
- Offset account
- no
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $10,000
- maximum borrowing amount
- $10,000,000
- type of mortgage
- Variable
- Repayment types
- Principal & Interest
- Availability
- Investor
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- -
Read our Mozo Review to learn more about the Unloan Unloan Variable
-
Fixed Rate
Owner Occupier, Principal & Interest, <80% LVR
interest rate
comparison rate
Initial monthly repayment6.54% p.a.
fixed 2 years7.10% p.a.Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.
CompareCompareFixed Rate
Enjoy up to $3000 cashback for eligible first home buyers and $2000 cashback for refinancers on eligible home loans with the ANZ Fixed Rate Home Loan. Get the security of repayment certainty with a competitive locked in rate. No ongoing fees to pay. Offset account on 1-year fixed loans ($10/month fee applies). Interest-only payments allowed.
- interest rate
- 6.59% p.a.
fixed 3 years
- comparison rate
- 7.06% p.a.
- interest rate
- 6.59% p.a.
fixed 3 years
- comparison rate
- 7.06% p.a.
- Upfront fees
- $160
- Ongoing fees
- $0.00
- Discharge Fee
- $160.00
- Extra repayments
- yes - free up to to lesser of 5% of original fixed loan amount, or $5,000 each year
- Redraw facility
- no
- Offset account
- Optional - $10 per month - 1 year fixed term only
- Maximum loan to value ratio
- 80.00%
- minimum borrowing amount
- $20,000
- maximum borrowing amount
- -
- type of mortgage
- Fixed
- Repayment types
- Principal & Interest
- Availability
- Owner Occupier
- Repayment options
- Weekly, Fortnightly, Monthly
- Special Offers
- $3,000 cashback for eligible First Home Buyers, $2,000 cashback when you refinance loans of $250k+, apply from 1 Dec 2022, settle within 180 days.
Read our Mozo Review to learn more about the ANZ Fixed Rate
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