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

Ceyda Erem

18 Sep 2018

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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

    2.48% p.a. variable

    2.50% p.a.

    $1234

    Product details Close details
    Smart Home Loan 80

    A low-rate home loan that could save you thousands, with no ongoing fees plus unlimited extra repayments and free redraws. Mozo Experts Choice Low Cost Home Loan 2020.^ You'll need to be borrowing $1 million or less and have at least a 20% deposit required.

    • 2.48% p.a. variable

    • 2.50% 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 Home Loan 80

  • HSBC

    2.09% p.a.
    fixed 2 years

    2.98% p.a.

    $1234

    Product details Close details
    Fixed Rate Home Loan

    Have the security of a fixed rate for 2 years with the option to split with one of the HSBC variable Home Loans. No ongoing monthly service fees or annual fees. Mozo Experts Choice Fixed Home Loan 2020^

    • 2.09% p.a.
      fixed 2 years

    • 2.98% p.a.

    • $0

    • $0.00

    • $300.00

    • yes - free up to $10,000 p.a.

    • no

    • no

    • $0

    • 80.00%

    • $50,000

    • $7,500,000

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Fixed Rate Home Loan

  • Athena

    2.34% p.a. variable

    2.34% p.a.

    $1234

    Product details Close details
    Celebrate Variable Home Loan

    Fast online application with no fees. Free extra repayments and redraw facility. Min 40% deposit. Crowned Best New Home Loan for 2020 by the Mozo Experts.^

    • 2.34% p.a. variable

    • 2.34% 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

  • UBank

    2.49% p.a. variable

    2.49% p.a.

    $1234

    Product details Close details
    UHomeLoan - Discount Offer

    Enjoy a super low rate, $0 fees and easy application with the Mozo Experts Choice Home Lender Bank of the Year.^ Free redraw with flexible repayments. Min 20% deposit.

    • 2.49% p.a. variable

    • 2.49% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • $0

    • 80.00%

    • $100,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the UHomeLoan - Discount Offer

  • Hot Deal $2,000 Refinance Cash Bonus (T&Cs apply)

    Suncorp

    2.68% p.a. variable

    2.69% p.a.

    $1234

    Product details Close details
    Back to Basics Special

    No monthly account keeping fee, no ongoing annual fee and no loan establishment fee on new lending of $150,000 or more. Get a $2,000 cash bonus when you refinance with an eligible Suncorp Bank Home Loan of $250k+. T&Cs & eligibility criteria apply.

    • 2.68% p.a. variable

    • 2.69% p.a.

    • $0

    • $0.00

    • $350.00

    • Yes - free

    • yes - free

    • no

    • $0

    • 80.00%

    • $150,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • Refinance from another lender to receive a $2,000 cash bonus for loans of at least $250,000 or $3,000 bonus for loans over $750,000. Available for loans with an LVR <90% and applications made by 18 December 2020 and settled by 26 March 2021.

    Read our Mozo Review to learn more about the Back to Basics Special

^See information about the Mozo Experts Choice Home loans Awards