Aussie home buyers now need to earn almost double the average income to afford a mortgage, following the Reserve Bank’s (RBA) 13 interest rate hikes.
The minimum household income to afford the average house is now $182,434, new Finder research found, while for units it is $129,731.
With the average full-time salary sitting at $96,000, that means buying a home is slipping increasingly out of reach for many Aussies - particularly those buying on a single income.
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“People are looking at stretching themselves financially in order to purchase a property,” Finder head of consumer research Graham Cooke said.
“Whilst not impossible, there are a lot of things to consider for those aspiring to own a home.”
These figures are based on the average Australian house price of $926,899, unit price of $659,130 and the average home loan interest rate of 6.24 per cent.
For those living in the city, the situation is even more dire.
For example, Sydney residents need an average income of $261,773 to comfortably afford a mortgage for the average house, while Canberra residents would need $186,980.
Those in Melbourne would need to earn $171,235 each year, while those in Brisbane would need a minimum income of $155,489.
$1,345 blow for mortgage holders
The RBA hiked the cash rate by 0.25 per cent to 4.35 per cent today, with governor Michele Bullock noting that inflation was “still too high” and was “proving more persistent than expected a few months ago”.
Inflation rose 1.2 per cent in the September quarter, up from 0.8 per cent in the June quarter. The annual inflation rate eased to 5.4 per cent, down from 6.0 per cent in June but still far above the RBA’s 2 to 3 per cent target.
Cooke said Aussies with the average $590,000 mortgage would now be forking out an extra $1,345 more per month following the central bank’s 13 rate hikes.
“That’s a huge amount of extra money to be spending on your mortgage, especially when the cost of almost everything else is also going up,” Cooke said.