Home Finance & Economy New data shows tough situation for first-home buyers in Australia

New data shows tough situation for first-home buyers in Australia


New data from RateCity.com.au reveals that would-be home buyers need to save a huge amount of money to avoid mortgage stress.

Explaining the concept of mortgage stress is Sally Tindall, RateCity.com.au research director, who says, “Mortgage stress is when 30 percent or more of your pre-tax income is going towards loan repayments.”

This situation is particularly critical for young people, especially if they are residents of Sydney. Though home buyers may see the benefit of cooled down property prices, they still need to earn over $161,000 every year to avoid mortgage stress in Sydney.

As per the Australian Bureau of Statistics, people aged 21 to 34 are earning an average of $56,000 each year – putting the goal of living free of mortgage stress far out of reach for Sydney’s young population.


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First home-buyers see similar problems over all of Australia – despite median house prices lowering, the amount needed for stamp duty and deposit in each capital city is still above six figures.

“It’s a massive barrier,” Tindall said. “It’s difficult to come up with five figures let alone six figures, particularly when wages growth has stagnated.”

It is little wonder, then, that the survey of the Household Income and Labour Dynamics in Australia (HILDA) saw the rates of home-ownership among Australian individuals aged 18 to 39 plummeted to 25 percent.

There is some positivity to be found, however, with some locations seeing signs of improvement among first-time home buyers. For instance, one-in-four home buyers in New South Wales are now first-time buyers. Positive movements were also seen in figures in Brisbane, Melbourne, Adelaide, as well as major regional centers like Bathurst and Geelong.

In addition, in June, first home buyers across the country accounted for 18 percent of all mortgage commitments. This represents the best figure seen since October 2012.

But the problems persist. For many, especially young Australians, the idea of purchasing a house is either financially impossible or an invitation for mortgage stress – high cost of living and existing debts stacked against them.