Invest
The 30% rule and its relevance in 2019
We’ve all heard the age-old adage, “Don’t spend more than 30 per cent of your income on property”. But as property prices rise, is it still a relevant rule to follow?
The 30% rule and its relevance in 2019
We’ve all heard the age-old adage, “Don’t spend more than 30 per cent of your income on property”. But as property prices rise, is it still a relevant rule to follow?
The rule states that individuals (or couples) should not spend more than 30 per cent of their regular income on housing-related expenses.
For a long time, the rule of thumb approach has been that any consumers who are spending more than this, relative to their level of income, are considered to be in financial distress.
But this rule of thumb might be changing, because CoreLogic’s Perception of housing affordability report has found that 2 per cent of would-be home owners indicate a willingness to spend double this amount to enter the market, and have considered spending up to 60 per cent of their income on a mortgage.
It comes as housing affordability continues to be an issue for first home buyers and investors.
Nine per cent of non-homeowners are willing to spend half their income on a mortgage despite the potential for putting themselves into financial stress, while a further 21 per cent of non-homeowners stated they would dedicate 40 per cent of their income to a mortgage.
A further 26 per cent are willing to dedicate 30-39 per cent of their income to secure a loan.
Commenting on the findings, CoreLogic CEO Lisa Claes said that despite the goal posts possibly changing, she still thinks the average Australian would be in financial distress if they spend more on servicing a loan.
On average, “Australian households are spending 35 per cent of their gross annual income to service their mortgage,” the CEO said.
“That is a significant amount of disposable income they need consistently to be able to service their loan.”
CoreLogic’s report also found that just short of a quarter of Australians would not be willing to break the 30 per cent rule and would only spend less on property expenses.
RELATED ARTICLES
About the author
About the author
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Property advice goes rogue as risks and opportunities knock on every door
A warning from the Property Investors Council of Australia has put a spotlight on the surge of unlicensed financial advice around property strategies. This is no niche compliance issue—it’s a ...Read more
Property
First‑home buyers now anchor Australia’s mortgage growth — but the risk maths is changing
Great Southern Bank’s revelation that nearly one in three of its new mortgages went to first‑home buyers is not an outlier. It is the leading edge of a broader market realignment powered by government ...Read more
Property
Home guarantee scheme shake-up challenges Australia’s housing market players
From 1 October 2025, the expanded Home Guarantee Scheme (HGS) materially widens what first-home buyers can purchase and where. By sharply lifting price caps and relaxing eligibility settings, the ...Read more
Property
GSB’s first‑home buyer play: turning policy tailwinds into market share
Great Southern Bank’s latest results show that nearly one in three of its new mortgages now go to first‑home buyers—evidence of a fast‑moving market reshaped by government guarantees, easing rates and ...Read more
Property
Why investors are fleeing and renters are scrambling in Australia's housing maze
Australia’s rental market is tightening even as individual landlords sell down. New data points to a multi‑year investor retreat tied to higher holding costs and regulatory uncertainty, while prices ...Read more
Property
Australia's 5% deposit guarantee: Unlocking gains while balancing risks in the market share race
Can a bigger government guarantee fix housing access without fuelling prices? Australia is about to find out. The Albanese government’s expanded 5% deposit pathway aims to help 70,000 buyers, remove ...Read more
Property
Australia's bold move the 5% deposit scheme shaking up the housing market
Can a government guarantee replace lenders mortgage insurance without inflating prices or risk? Canberra’s accelerated 5% deposit scheme is a bold demand-side nudge in a supply‑constrained marketRead more
Property
When rates drop but stress sticks: exploring Australia's mortgage arrears dilemma
Headline numbers suggest arrears ease as rates come down. The reality in Australia is messier: broad measures dipped into mid‑2025, yet severe delinquencies and non‑bank portfolios remain under ...Read more
Property
Property advice goes rogue as risks and opportunities knock on every door
A warning from the Property Investors Council of Australia has put a spotlight on the surge of unlicensed financial advice around property strategies. This is no niche compliance issue—it’s a ...Read more
