Invest
Who had it easier? Buying in 1990 v 2018
In 1990, the official interest rate was 17 per cent but since then, average mortgages have increased nearly twice as fast as wages. So, when was it easier to buy?
Who had it easier? Buying in 1990 v 2018
In 1990, the official interest rate was 17 per cent but since then, average mortgages have increased nearly twice as fast as wages. So, when was it easier to buy?
The Reserve Bank of Australia has held the official interest rate at a record-low 1.50 per cent since August 2016 and pundits predict it will stick at this rate for at least a few months, to a year longer.
This low interest rate environment is in notable contrast to the record-high 17 per cent of February 1990.
According to RateCity spokesperson Sally Tindall, this is a reality "many Australians would rather forget".
"Now we’re living in a period of record-long, record-low interest rates," Ms Tindall said.
RateCity analysis compared the the February 1990 and May 2018 cash rates along with average loan sizes, $67,700 and $388,100, respectively. Average annual wages of $27,284 and $81,619 were also factored in.
Based on these elements, the average home-buyer in 1990 would spend 42.45 per cent of their income on their mortgage. The average home-buyer in 2018 would be forking out a lower 28.91 per cent.
However, there's more to it than that, Ms Tindall added.
"The key difference between 1990 and today is that average mortgages have risen nearly two times faster than wages," she said.
“So, when it comes to paying down the mortgage each month, when you factor in the record low interest rates, we’re actually better off. But ask a first home buyer to stump up a 20 per cent deposit today, and you’ve got them snookered before they’ve even started."
RELATED ARTICLES
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
Real estate investment: Spotting high-growth potentials
Investing in real estate has long been a favoured approach for Australians looking to grow their wealth. Read more
Property
Granny flats become Aussie families' cost-effective solution to soaring living costs
As the cost of living skyrockets, a forward-thinking trend is sweeping across Australia – granny flats are becoming a favoured living arrangement for older Aussies seeking comfort and proximity to ...Read more
Property
Homebuyers grapple with extended savings period amid affordability crisis
Gone are the days when an Australian dream home seemed just within reach. The path to homeownership in Australia has extended by at least two arduous years, as revealed by the latest insights from ...Read more
Property
Hybrid development unlocks new potential for NDIS housing in metro hotspots
In a ground-breaking strategy aimed at addressing the stark imbalance between the location of Specialist Disability Accommodation (SDA) developments and the actual areas of demand, Aligned Disability ...Read more
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. Read more
Property
Retirement communities: a pivotal element in meeting Australia's housing targets
The Retirement Living Council (RLC) has recommended that retirement communities should be considered a vital part in the Australian Government's initiative to fulfill the Housing Australia Future Fund ...Read more
Property
Australians adjust financial strategies amid changing property market dynamics
The 2023 calendar year saw Australian borrowers acquiring a total of $300.9 billion in new loans for property purchases, marking a 12.7% decrease from the previous year. Read more
Property
Split home loans unlocking doors for Aussie buyers
Australians are teaming up to dive into the real estate market and seize the advantages of home ownership, with the trend of split home loans surging as family and friends unite to buy properties ...Read more
Property
Real estate investment: Spotting high-growth potentials
Investing in real estate has long been a favoured approach for Australians looking to grow their wealth. Read more
Property
Granny flats become Aussie families' cost-effective solution to soaring living costs
As the cost of living skyrockets, a forward-thinking trend is sweeping across Australia – granny flats are becoming a favoured living arrangement for older Aussies seeking comfort and proximity to ...Read more
Property
Homebuyers grapple with extended savings period amid affordability crisis
Gone are the days when an Australian dream home seemed just within reach. The path to homeownership in Australia has extended by at least two arduous years, as revealed by the latest insights from ...Read more
Property
Hybrid development unlocks new potential for NDIS housing in metro hotspots
In a ground-breaking strategy aimed at addressing the stark imbalance between the location of Specialist Disability Accommodation (SDA) developments and the actual areas of demand, Aligned Disability ...Read more
Property
Property prices boosted by housing policies: RBA
The central bank has outlined the “pervasive” impact that policy has on property. Read more
