RBA governor Philip Lowe said inflation is the highest it’s been since 1990 and the central bank is working to get prices under control to ensure a “soft landing” for the economy.
“The Board expects that further increases in interest rates will be needed over the months ahead to ensure that inflation returns to target and that this period of high inflation is only temporary,” Lowe said.
“Australians with the average loan size of around $600,000 will be paying $1,000 more per month, compared to what they were paying in April last year,” Cooke said.
“That’s a significant amount of extra money to allocate towards your mortgage every month – especially when household budgets are already stretched thin.”
“If that doesn’t work, consider refinancing your home loan. Even trimming your rate half a percentage point can save you hundreds a month,” Cooke said.
First home buyers also feeling the pain
Finder analysis found it was increasingly difficult for the average Australian to get onto the property ladder.
To comfortably afford a $1.3 million house in Sydney (the median house value), your household income would now need to be more than $255,000.
In Melbourne, prospective homeowners would need a combined income of more than $174,000 to afford an $888,000 house, while those in Brisbane would need almost $148,000 for the median house value of $752,000.
Sydneysiders hoping to purchase a $740,000 unit (the median unit price) would need a minimum household income of more than $145,000.
Those in Melbourne looking for an apartment would need $119,000, while those in Brisbane would need a household income of more than $92,000.
The median personal income in Australia is $52,338, while the median annual household income is $90,792, according to the Australian Bureau of Statistics.
Cooke said, despite property prices falling, the average first home buyer was still in a tough spot.
“With the cost of living on the rise and salaries failing to keep pace, homeownership – particularly in the capital cities – is slipping further out of reach for many,” Cooke said.
“Prospective buyers are looking at borrowing significantly more than pre-pandemic levels, and with higher interest rates. For many, the dream of home ownership remains a fantasy.”