Australian homeowners are facing a brutal financial reality, with new analysis revealing a staggering $19,000 annual hit to their hip pockets compared to a decade ago.
It’s a figure that lays bare the nation’s housing affordability crisis, proving that for many, the struggle isn’t just getting into the market, but staying afloat.
According to fresh data from Compare the Market, the average Aussie homeowner is now forking out an eye-watering $1588 more on monthly repayments than they were 10 years ago. Over a 12-month period, that’s a jaw-dropping $19,056 extra draining from household budgets.
The surge comes despite interest rates being at similar levels to 2015, highlighting how the doubling of average loan sizes in some parts of the country has sent repayments skyrocketing.
While the national average is grim, some states are feeling the pinch even more acutely.
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Homeowners in Queensland have copped the biggest increase, now paying an average of $22,524 more a year.
Homebuyers now pay $433,300 more for a property than they would have 10 years ago, forcing them to spend, on average, $1588 more on monthly repayments.
New South Wales residents are close behind, with an average increase of $21,888 annually, while South Australia homeowners are facing an extra $21,012 a year.
Western Australia has seen repayments jump by $17,220 annually, Tasmania is up by $16,764 a year, the ACT is feeling an additional $16,068 annually, and Victoria homeowners are paying an extra $15,120 a year.
It comes as Australian Bureau of Statistics data shows the average price of residential dwellings has jumped by $433,300over the past 10 years, up from $612,100 to $10454m in the respective December quarters.
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Source: Compare the Market
Compare the Market property expert Andrew Winter didn’t mince words, stating that for many Australians, “the struggle isn’t getting in, it’s staying in”.
“The path to homeownership in Australia isn’t easy, and these figures tell us why,” he said. “So often the emphasis is put on raising a deposit but for many the real challenge begins when they start servicing their loan.
“Repayments on average homes in our capital cities aren’t cheap and for many working Australians they just aren’t affordable. So, while the government has done some good work helping people into the market by reducing the amount of money they need to save for a deposit, they haven’t really gotten to the heart of the issue.”
And the pain could intensify.
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Source: Compare the Market
Mr Winter warned that “if the cash rate goes up again this year, I think a lot of people are really going to feel it”.
A single 0.25 per cent cash rate increase could add an extra $110 onto monthly repayments for an average loan of $694,000 – that’s another $1320 annually.
In this challenging environment, Mr Winter stressed the critical importance of homeowners and homebuyers actively “shopping around” to secure the cheapest rates and keep their repayments as low as possible.
“As the cost of owning a home gets even more expensive, we have to make the most of the few ways that we can still save, by shopping around for a better home loan,” he advised.
“A little difference between rates may not sound like much but remember it could mean paying hundreds or even thousands of dollars less over the life of your mortgage.”
However, there’s a silver lining for existing homeowners.
“If you are an existing homeowner, increased rates are bad news, and the cost of ownership is high. However there is a positive, increased values means increased equity,” Mr Winter pointed out.
“Lenders love homeowners with better loan-to-value ratios, and that equity could be a power lever when you negotiate.”
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