Property shock: 1 in 3 Aussies couldn't afford to buy their home today

Ceyda Erem

18 Sep 2018

Hl for mz content

There are some things that make the good old days hard to forget - big hair, how far $2 got you at the school canteen, or apparently, being able to afford your first home.

According to recent Mozo research, 35% of Aussies homeowners would not be able to afford the property they own now if they were to try to buy it today, thanks to skyrocketing property prices.

Unsurprisingly, Sydney and Melbourne have seen the biggest price increases, with prices jumping by 105% and 93.5%, respectively.

“A whopping 40% of Australians purchased their home between 2011-2018, while a further 28% purchased property between 2001 - 2010. This period signifies an unforgettable time in Australian property history where prices rose at an alarming rate, auctions ran red hot and properties sold for prices that economists could have never predicted,” said Mozo property expert, Steve Jovcevski.

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And according to Jovcevski, the sky high prices have divided the nation between the lucky ones and those whose luck ran out.

“Staggering increases in house pricing coincided with record low interest rates which further fuelled a property buying frenzy. This has resulted in an Australian housing market that leaves some feeling lucky they got in while they did, but also a large portion of Australians feeling like they missed their opportunity and are now essentially locked out of the property market.”

The research also found that a massive 95% of Aussies have no regrets buying their property, and for good reason, as one in 5 homeowners estimate that their home has increased in value by $151,000 - $330,000 since purchasing.

And while it’s good news for current homeowners, Jovcevski predicts that with the change in lending criteria, there’s no turning back for the Aussie property market.

“Australian property prices have risen by over 600% over the past 30 years while national incomes have failed to keep up. While the housing market has certainly cooled in major metro areas such as Sydney and Melbourne, there’s no way that prices will be dropping back to the price ranges before the property boom,” he said.

“With the introduction of stricter lending criteria, stagnant wage growth and largely unattainable house prices, the Australian property market is now essentially broken for many hopeful property owners looking to make their first purchase.”

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And with the change in lending criteria and rising interest rates, Aussies who purchased their dream home years ago are now unable to refinance.

However Jovcevski said that if you are finding it tough to refinance your mortgage, there are other ways to mend your uncompetitive rate.

“If you’re finding yourself ‘stuck’ with your bank, consider other ways to improve an uncompetitive rate. Whether it’s contacting your existing lender and pushing hard for a lower rate or talking to a non-bank lender that may be willing to take you on as a borrower, there may be ways to slash thousands off the cost of your loan,” he said.

If you are one of the lucky Aussies about to buy your dream property, head over to our home loan comparison tool to find a good deal. And if you’re in the market to refinance, see if there are better options around for you using our Switch and Save calculator.

5 home loan offers

Rates updated daily. Advertiser disclosure.

  • loans.com.au
    Mozo Expert Choice Badge" style="width:60px;">

    1.85% p.a.variable for 24 months and then 2.25% p.a. variable

    2.21% p.a.

    $1234

    Product details Close details
    Smart Booster Home Loan

    2 Year Discounted Variable Rate, Owner Occupier, Principal & Interest, <80% LVR

    1.85% p.a.variable for 24 months and then 2.25% p.a. variable

    2.21% p.a.

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

    Smart Booster Home Loan

    New super low introductory rate home loan for two years. Min 20% deposit. No monthly or ongoing fees. Fast settlement times. Mozo award-winning online lender. Friendly, local Australian based team.

    • 1.85% p.a.variable for 24 months and then 2.25% p.a. variable

    • 2.21% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • Optional - with 0.10% additional interest

    • $520

    • 80.00%

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Booster Home Loan

    Details Close

  • UBank

    1.79% p.a.
    fixed 1 year

    2.32% p.a.

    $1234

    Product details Close details
    UHomeLoan

    Owner Occupier, Principal & Interest

    1.79% p.a.
    fixed 1 year

    2.32% p.a.

    Fast, easy to apply and no ongoing fees. Choose between weekly, fortnightly or monthly repayments. 1 year fixed rates are for new Owner Occupier Principal & Interest loans.

    UHomeLoan

    Fast, easy to apply and no ongoing fees. Choose between weekly, fortnightly or monthly repayments. 1 year fixed rates are for new Owner Occupier Principal & Interest loans.

    • 1.79% p.a.
      fixed 1 year

    • 2.32% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free up to $20,000 during fixed rate term

    • no

    • no

    • $0

    • 80.00%

    • $100,000

    • $2,000,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • $395 Establishment fee waived for fixed rate loans that settle by 30 September 2021.

    Read our Mozo Review to learn more about the UHomeLoan

    Details Close

  • Macquarie

    2.09% p.a.
    fixed 3 years

    2.32% p.a.

    $1234

    Product details Close details
    Basic Home Loan

    Fixed, Owner Occupier, Principal & Interest, LVR<70%

    2.09% p.a.
    fixed 3 years

    2.32% 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.

    Basic 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.

    • 2.09% p.a.
      fixed 3 years

    • 2.32% p.a.

    • $0

    • $0.00

    • $400.00

    • yes - free

    • yes - free

    • no

    • $0

    • 70.00%

    • $150,000

    • $750,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Monthly

    Read our Mozo Review to learn more about the Basic Home Loan

    Details Close

  • Athena
    Mozo Expert Choice Badge" style="width:60px;">

    1.99% p.a. variable

    1.99% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    <60% LVR, Owner Occupier, Principal & Interest

    1.99% p.a. variable

    1.99% p.a.

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    Celebrate Variable Home Loan

    Fast and efficient online application. Automatic discounts as loan is paid down. Free extra repayments and redraw facility. Zero fees. Min 40% deposit required. Winner of three Mozo Expert's Choice Awards for 2021.

    • 1.99% p.a. variable

    • 1.99% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 60.00%

    • $100,000

    • $2,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Celebrate Variable Home Loan

    Details Close

  • Nano

    1.99% p.a. variable

    1.99% p.a.

    $1234

    Product details Close details
    Variable Home Loan

    Owner Occupier, Principal & Interest

    1.99% p.a. variable

    1.99% p.a.

    Refinance only. Super-fast digital application process. Zero upfront fees. No on-going service fees. Free 100% offset sub account. Comes with Visa debit card and the ability to use digital wallets; Apple and Google Pay. 25% deposit required.

    Variable Home Loan

    Refinance only. Super-fast digital application process. Zero upfront fees. No on-going service fees. Free 100% offset sub account. Comes with Visa debit card and the ability to use digital wallets; Apple and Google Pay. 25% deposit required.

    • 1.99% p.a. variable

    • 1.99% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • yes - offset sub account

    • $0

    • 75.00%

    • $100,000

    • $2,500,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Monthly

    Read our Mozo Review to learn more about the Variable Home Loan

    Details Close

^See information about the Mozo Experts Choice Home loans Awards