Average pay wont buy a home - Ozland

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theage.com.au/news/national/ … 39246.html

THE average Australian family can no longer afford the average home mortgage, according to new figures that paint a devastating picture of how unaffordable housing has become in capital cities like Melbourne.

As the Reserve Bank considers raising interest rates again next week, figures from the Real Estate Institute of Australia suggest households on average incomes would need to spend $3 in every $8 they earn just to service an average mortgage.

After tax is deducted, it gets worse: the figures imply that almost half the typical family’s disposable income would be consumed by the average mortgage.

The housing affordability index, published by the Real Estate Institute and mortgage guarantor Deposit Power, shows that the combination of soaring house prices and higher interest rates is pricing both buyers and renters out of the market.

In the December quarter, servicing the median home loan required 37.4% of gross median family income, up sharply from 36.6% in September and 35.2% a year ago, said the institute’s president, Noel Dyett. It was the worst result recorded since the survey began 22 years ago.

After income tax, the figures imply that just under 50% of disposable income is required to service an average mortgage.

Families renting their home required 23.9% of gross median income to pay median rent, up from 23.3% in September.