Sydney property more affordable than 26 years ago, says study
While the debate over Sydney’s soaring property prices continues, new research shows that the housing market is more affordable than it was 26 years ago.
- From woe to go: the process of buying your first home
According to the latest data from BIS Shrapnel, homebuyers in 1989 had to use almost half of their income to pay off their mortgage as opposed 35.9% now.
One of the reasons for this is also that even with higher prices, because of the record low interest rates, a smaller proportion of the homeowners’ incomes goes towards mortgage.
"The interest rate was 17% at that time. It spiked so high, the whole country went into recession," BIS Shrapnel's senior manager of residential, Angie Zigomanis, said.
But experts also warn that a rise in interest rates can lead to a sudden change in the affordability trend.
The best time to be paying off a mortgage was 1997, when just 24% of a homebuyer's income was needed to pay off a home loan, but then came the boom, reported Domain.com.au.
"In the early 2000s, Sydney went through a massive boom, arguably a stronger boom than now," Mr Zigomanis said.
Just last week, RBA Governor Gelnn Stevens said that Sydney’s rising property prices were “acutely concerning.”
Currently, the biggest challenge for first-home buyers is not actually repayments, but higher asking prices requiring hefty deposits.
Home loan comparisons on Mozo - page last updated October 17, 2020
Search promoted home loans below or do a full Mozo database search. Advertiser disclosure.
Sorted by:
Mozo Order
- Macquarie
2.54% p.a. variable
2.81% p.a.
MacquarieOffset Home Loan
Owner Occupier, LVR<70%, Principal & Interest
2.54% p.a. variable
2.81% p.a.
Handy offset account to help pay your home loan off sooner. Up to 10 offset accounts per loan account available. Fee free access at ATMs. Waived credit card annual fee. $0 international purchase fees.
Go to siteCompare - loans.com.au
2.48% p.a. variable
2.50% p.a.
loans.com.auSmart Home Loan 80
Owner Occupier, Principal & Interest
2.48% p.a. variable
2.50% p.a.
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.
Go to siteCompare - HSBC
2.09% p.a.
fixed 2 years2.98% p.a.
HSBCFixed Rate Home Loan
Owner Occupier, Principal & Interest, LVR <80%
2.09% p.a.
fixed 2 years2.98% p.a.
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^
Go to siteCompare - Athena
2.34% p.a. variable
2.34% p.a.
AthenaCelebrate Variable Home Loan
<60% LVR, Owner Occupier, Principal & Interest
2.34% p.a. variable
2.34% p.a.
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.^
Go to siteCompare Hot DealUp to $1,500 cash back on refinances (T&Cs apply)
Homestar2.29% p.a. variable
2.32% p.a.
CompareDetailsHomestarStar Essentials Home Loan
Owner Occupier, Principal & Interest
2.29% p.a. variable
2.32% p.a.
Low Cost Home Loan 2020 winner.^ A home loan packed with all the essentials and offering up to $1500 cashback and no ongoing fees. No Construction loans.
Compare
^See information about the Mozo Experts Choice Home Loans Awards
Mozo provides general product information. We don't consider your personal objectives, financial situation or needs and we aren't recommending any specific product to you. You should make your own decision after reading the PDS or offer documentation, or seeking independent advice.
While we pride ourselves on covering a wide range of products, we don't cover every product in the market. If you decide to apply for a product through our website, you will be dealing directly with the provider of that product and not with Mozo.
