Invest
How much time do you need to raise a house deposit?
Half a year has been cropped off the time Aussies need to raise a house deposit as a result of a rapid increase in housing affordability, which pursued significant declines in median house prices in Sydney and Melbourne.
How much time do you need to raise a house deposit?
Half a year has been cropped off the time Aussies need to raise a house deposit as a result of a rapid increase in housing affordability, which pursued significant declines in median house prices in Sydney and Melbourne.
The Australian housing market featured diverse changes in the affordability of both housing deposits and repayments in certain cities in the third quarter of 2020, as the market adjusted to the impacts of the COVID pandemic, new research by a local conservative think tank showed.
Figures published by the Australian Institute for Progress revealed a drop in the total number of weeks it takes to raise a deposit, with the national average now sitting at 764.9 weeks, having decreased by 8.9 weeks over the September quarter.
In Sydney, a $21,000 drop in house prices saw the time required to raise a deposit shrink by 23 weeks. Similarly, in Melbourne this number was brought down by 22 weeks following a price decrease of $20,000.
Deposits also dropped in Hobart where the median house price shrunk by $9,700, but rose in Brisbane, Adelaide, Darwin, Canberra and Perth, where house prices clocked increases.
On the back of the AIP’s research, executive director Graham Young said: “The least affordable city is Hobart, followed by Canberra, Melbourne and Adelaide. Most affordable is Perth, followed by Brisbane and then Sydney.”
On Friday, RBA governor Philip Lowe has said that the Reserve Bank is not responsible for targeting house prices, after questions were raised about the creation of a raging bull market against the backdrop of low interest rates.
“The RBA does not, and should not, target housing prices. Instead, our focus is on the lending that is used to purchase housing,” Dr Lowe said in front of Parliament’s standing committee on economics on Friday.
Questioned about the point at which the RBA will act to prevent the creation of “unsustainable prices”, Mr Lowe reiterated that the issue for the central bank would be if people didn’t borrow sensibly.
“We shouldn’t try and control asset prices,” the governor said.
According to analysts, the record-low interest rate will send property prices soaring.
Shane Oliver, chief economist at AMP Capital, expects that the RBA’s decision to keep interest rates at 0.1 of a percentage point will leave mortgage rates at record lows, which, along with government home-buyer incentives and economic recovery, will continue to push average property prices higher.
“Headline inflation will rise due to base effects as the collapse in petrol prices and childcare costs drops out of annual comparisons, but underlying inflation will remain low at around 1.5 per cent or less out to next year,” Mr Oliver said.
“This, in turn, will see the RBA leave rates at 0.1 [of a percentage point] probably out to end 2022 at least.”
About the author
About the author
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more
Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more
Property
5 tips to unearth the next property hotspots
A property expert has bullishly claimed that property hotspots are a “complete myth” that almost guarantees buyers will pay top dollar, and has instead urged buyers to seek out the “warm spots...Read more
Property
Top 10 inland rural towns to invest in
While it’s become apparent that regional housing markets have stolen the spotlight, having outpaced their capital city counterparts in 2020, new research has shown that inland rural towns have also ...Read more
Property
Where to buy under $300k
A positively geared property with high capital growth potential does not necessarily need to carry an astronomical price tag, an expert has said, with new market entrants able to land a home for under...Read more
Property
‘Great Australian dream’ of owning a home lives on amid COVID
Most Australian investors and home buyers were largely undeterred by the events of 2020, remaining eager to push through with their investment plans, a new survey has found. ...Read more
Property
Poor wage growth could impede home price growth
With wages growth at record-low levels, a property expert has warned that continuing low and flat wages could impede home price growth. ...Read more
Property
Negotiating a lower interest rate on your property loan
The banks are customer hungry, meaning they’re willing to offer increased discounts to new customers and apply these discounts to existing customer loans, a mortgage broker has said. ...Read more
Property
How to determine the real value of a property
With various factors affecting market value and pricing, can one truly predict what buyers will pay for properties? ...Read more
Property
House prices tipped to soar 20% in 2 years: Westpac
House prices in Sydney are tipped to grow by 20 per cent over the next two years, and by 18 per cent in Melbourne, as a leading economist predicts strong economic growth following the rollout of the C...Read more
Property
5 tips to unearth the next property hotspots
A property expert has bullishly claimed that property hotspots are a “complete myth” that almost guarantees buyers will pay top dollar, and has instead urged buyers to seek out the “warm spots...Read more
Property
Top 10 inland rural towns to invest in
While it’s become apparent that regional housing markets have stolen the spotlight, having outpaced their capital city counterparts in 2020, new research has shown that inland rural towns have also ...Read more
Property
Where to buy under $300k
A positively geared property with high capital growth potential does not necessarily need to carry an astronomical price tag, an expert has said, with new market entrants able to land a home for under...Read more
Property
‘Great Australian dream’ of owning a home lives on amid COVID
Most Australian investors and home buyers were largely undeterred by the events of 2020, remaining eager to push through with their investment plans, a new survey has found. ...Read more
More articles
Website Notifications
Get notifications in real-time for staying up to date with content that matters to you.
