The 10-year increase in house prices
24 Sept 2014
Are we in the midst of a housing bubble? Are house prices set to skyrocket further? Are we set to become a nation of renters? Is the Australian property market headed for a big crash? With so many varied opinions being debated it can be difficult for first home buyers to know what to do. Buy now or hold off in case prices fall?
There’s no perfect answer, but it’s good to take stock of exactly what is happening in the world of home loan repayments in order to ascertain just how affordable that first home loan could be…
In the table below, CANSTAR analysts have researched the average increase in home loan repayments on a state-by-state basis when compared to the increase in general inflation over the past 10 years (which, according to the RBA, is 31.4%). The largest increase in real terms has been seen in the Northern Territory, with loan repayments rising a massive 94% over that period. Even in Queensland, where the rise has been comparatively low (at 34%) it is still higher than inflation.
| State/Territory | June 2004 | June 2014 | Difference in loan repayment | |||
| Average loan size | Average loan repayment | Average loan size | Average loan repayment | $ | % | |
|
NSW |
$251,100 |
$1,786 |
$367,200 |
$2,346 |
$560 |
31% |
|
VIC |
$200.900 |
$1,429 |
$330,500 |
$2,111 |
$682 |
48% |
|
QLD |
$199.900 |
$1,422 |
$297,600 |
$1,901 |
$479 |
34% |
|
SA |
$150.400 |
$1,070 |
$261,200 |
$1,669 |
$599 |
56% |
|
WA |
$159.900 |
$1,137 |
$318,700 |
$2,036 |
$899 |
79% |
|
TAS |
$134,500 |
$957 |
$220,000 |
$1,405 |
$448 |
47% |
|
NT |
$162,200 |
$1,154 |
$350,400 |
$2,238 |
$1,084 |
94% |
|
ACT |
$234,100 |
$1,665 |
$327,100 |
$2,089 |
$424 |
25% |
|
Australia |
$205,600 |
$1,462 |
$327,000 |
$2,089 |
$627 |
43% |
Source: Canstar & ABS. Based on loan taken over 25 years taking into account the average of the four major bank’s standard variable interest rates.
Of course, these increases in repayment are based on our currently-low interest rates, otherwise the increase in repayments could be much higher…
There’s no doubt, then, that it pays to save. The higher the deposit you’re able to accrue before venturing into the world of home loans, the better off you’ll be. Our Home Buying Guide has a wealth of savings and loan tips to get you started.
Also, you can try out our easy-to-use home loan calculators to get an idea of things such as your borrowing power, repayment costs and potential savings from switching to a new rate.
Try our First Home Buyers comparison tool to instantly compare Canstar expert rated options.
