Melbourne housing affordability: Median earners spend 44.4 per cent of wages on mortgage, report shows
Homeowners on a median wage are outlaying almost half their salary on the mortgage, an alarming new report has revealed. Find out how long it now takes just to save for a home deposit.
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Melbourne homeowners earning a median wage are spending almost 45 per cent of their income on the mortgage, a new report has found.
The ANZ and CoreLogic housing affordability report, released today, shows a massive chunk of the population is struggling with the cost of living.
Households that spend 30 per cent or more of their income on housing costs are typically considered to be experiencing mortgage stress.
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The research was based on gross median household income data modelled by the Australian National University’s Centre for Social Research and Methods, as well as CoreLogic housing values and rents.
The report stated that in Melbourne, the portion of a median $107,638 income required to service a new mortgage has increased – along with interest rates – from 31.9 per cent to 44.4 per cent across three years.
Greater Melbourne’s median dwelling value, including both houses and units, reached
$778,541 last month, according to the research.
PropTrack figures put Melbourne’s median house value at $924,000 and $626,000 for units in October.
ANZ senior economist Adelaide Timbrell said “many median incomes households can’t really afford a median house”.
“People on median incomes, they have to live in a below-median home if they want to comfortably afford the mortgage,” she said.
The study determined that it typically takes Victorians 11.6 years to save a 20 per cent house deposit. For units, the figure stands at 7.6 years.
In addition, the report described house prices as a “barrier” to many key workers such as paramedics, nurses and firefighters on a low to moderate income who are want to buy in Melbourne.
For an experienced teacher earning $112,333 per year, only 14.9 per cent of homes have a “manageable mortgage payment” assuming they have a 20 per cent deposit and can afford to spent up to a third of their salary on a mortgage.
Earlier this month, an Anglicare report revealed just 0.6 per cent of Victorian rental homes are affordable for social and community service workers.
Ms Timbrell said “housing affordability is a really huge issue with a lot of moving parts” meaning it was unlikely a quick fix could be found.
She said increasing housing supply for both buyers and renters and boosting government policies to strengthen housing availability and affordability would assist.
It would also help if more short-term accommodation homes became longer-term rentals, Ms Timbrell added.
The report cames PropTrack’s latest Market Insight report, released today, showed 16.6 per cent of the state’s dwellings are cheaper to buy than rent.
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