RBA governor Philip Lowe could afford a $7m home after recent rate hikes
As Aussies battle huge interest rate hikes, RBA boss Philip Lowe, currently unburdened by a bank loan, would have his pick of multimillion-dollar mansions if he turned homebuyer.
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Soaring interest rates may have crashed many Aussies’ hopes of home ownership, but the Reserve Bank governor, who has spearheaded the increases would still be able to afford a mortgage on a $7m home if he wanted a new property.
Analysis from Rate City has revealed how the nine consecutive interest rate hikes since May would affect the borrowing power of someone with Dr Philip Lowe’s income, indicating such a home seeker would still have a significant budget for buying.
Such a position is in stark contrast to many would-be homebuyers and homeowners simply trying to keep up with loan repayments.
Dr Lowe reportedly lives in a $4m Randwick house mortgage free and has not indicated any plans to move.
But an individual borrower earning Dr Lowe’s reported yearly remuneration of $1m would still be able to borrow $5.5m from the bank.
This would be down $2m from $7.6m in April last year, but still enough to snap up a luxury house in up-market Dover Heights in Sydney’s exclusive Eastern Suburbs, where prices have boomed 50 per cent in the last five years.
This assumed the buyer was armed with a 20 per cent deposit, and had minimal expenses, no dependants and no existing debt.
MORE: Shock number of homeowners behind on repayments
$500k hit: homebuyers’ wage shock as rates skyrocket
Those earning an average income of $92,000 a year have seen their borrowing capacity fall by $176,000, from $684,100 to $507,900 under the assumption that their wage increased 3.5 per cent to $95,000 in the same period.
HOMES RBA GOVERNOR PHILIP LOWE COULD AFFORD
Among the properties that would be affordable for someone on Dr Lowe’s salary is a three-storey Dover Heights house currently listed with a $6.7m price guide.
The home has sweeping views across the harbour and city skyline, an internal lift and glass-wrapped interiors, a heated pool and jacuzzi and a cinema room with kitchenette.
Other options include a waterfront property on Hudson Pde in Clareville.
Also three storeys, the 1144sq m deep waterfront parcel has views of Pittwater from almost every room as well as its outdoor spa.
Marketed through Belle Property Avalon, it’s well below budget with a price guide of $5.5m.
Going west could deliver more bang for buck, as this Mount Vernon mansion shows.
Fit for a king, or governor, the six bedroom mansion with separate guesthouse has a Beverly Hills vibe, with palatial living areas and a grand staircase decked in imported Avorio Limestone.
It sold for $6.6m in January.
There would also be options if the buyer was looking for something more secluded.
About 38km west of Kingscliff in the far north, this $7m Nobbys Creek acreage has its very own 1km sealed airstrip and 1,000sq m aircraft hanger.
It also has views of the aptly named Mount Warning.
When the cash rate was at its lowest in April last year, an individual earning $1m with a 20 per cent deposit could have potentially afforded a $9.5m house like this six bedroom property in Vaucluse.
It sold for $9.45m in March 2022 and features a heated pool with cabana as well as three living areas.
This waterfront property in Seaforth would have been another solid contender last year.
It sold for $8.3m and has floor to ceiling views of the harbour.
In contrast, an individual earning the average income of $95,000 could now potentially afford a $600,000 house following the RBA’s nine consecutive rate hikes.
While there are only a handful of freestanding houses available to purchase in Sydney at that price, options include this three bedroom fibro house in Blackett, north of Mount Druitt.
Photos of the house show mould growing on the ceilings and on the walls of the bathroom. Features include an internal toilet and a freestanding shed.
With a guide of $500,000, this nearby Tregear house has an original kitchen and bathroom, making it perfect for an Ikea renovation.
Those who want to be closer to the water could consider this two-bedroom holiday park cabin in Lower Portland.
Part of the Hawkesbury Riverside Retreat, the furnished cabin is one and a half-hour’s drive from the city and is listed for $525,000.
MORE: Interest rate cuts: when borrowers can expect relief
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