An Inconvenient Truth: You're Paying Less For Your Mortgage Now Than A Decade Ago!

Well, this doesn’t make sense does it?! But . . . here are the facts:

Record-low mortgage rates have made it easier to meet the payments on home loans than it has been in decades, despite record-high house prices, new figures show.

Confounding talk of affordability, the Bureau of Statistics calculations show that as recently as 2005-06 it took an average household 19 per cent of its gross income to meet ongoing housing costs. By 2015-16, it had fallen to 16 per cent, the least in records going more than 20 years.

The average mortgaged household now spends less of its income on housing than it does on food, a turnaround from earlier surveys in which it spent more. Housing costs include mortgage payments and water and rate payments.

Adjusted for inflation, the average mortgaged household paid $434 per week in 2015-16, much the same as in 2005-06. But over the same period the average income of mortgaged households climbed from $2272 per week to $2759.

Two out of every nine homeowners owned more than one property, either for use as a second home or for renting out. One in 14 owned more than three.

Within the Club, we have many members successfully holding multiple properties for the long-term!

What are people doing with these extra funds, safely putting them into property!

As . . .

Australian home loan lending hits a record high as investors stage a comeback

The value of Australian home loan lending jumped to the highest level on record in August, driven by a spike in loans to investors.

According to the Australian Bureau of Statistics (ABS), housing finance jumped by 2.1% to $33.9 billion in seasonally adjusted terms, surpassing the previous record peak of $33.75 billion set in January this year.

Have a great weekend and catch you next week!

Troy Gunasekera