Westpac published the following chart showing that the average minimum mortgage repayment has surged since 2022.
“Over the two years to January 2024, the average minimum repayment increased by 42.2%, or about $754, while average incomes grew just 8.5% (or $641)”, Westpac noted.
CBA also published the following chart showing that average loan repayments have soared by around 60% since the start of the pandemic, whereas average rent payments have risen by around 40%.
Advertisement
Based mostly on the above information, it might be simple to conclude that mortgage holders have suffered a bigger cost-of-living shock than renters.
Nonetheless, the longer term appears brighter for mortgage holders than tenants.
Advertisement
The most recent rate of interest futures pricing predicts that the Reserve Financial institution of Australia (RBA) will ship 4 extra 0.25% rate of interest cuts this calendar 12 months, with the money fee forecast to finish the 12 months at 3.0%.
A commensurate 1.0% decline in mortgage charges would clearly decrease common mortgage repayments, easing stress on mortgage holders.
Advertisement
Australian tenants face no such luck, with rents prone to proceed rising amid ongoing tight vacancies as inhabitants demand outstrips provide.
The most recent internet long-term arrivals information from the Australian Bureau of Statistics, as offered beneath by Justin Fabo from Antipodean Macro, reveals that internet migration doubtless accelerated in Q1 2025 and stays at traditionally excessive ranges.
Advertisement
On the similar time, dwelling building charges stay caught close to decade lows:
Advertisement
Up to now, tenants have mitigated the rental disaster by transferring again into shared housing.
As illustrated beneath, the typical family measurement has rebounded, monitoring above the degrees of the early-to-mid-2000s throughout the capital cities.
Advertisement
As explained by Alan Kohler final month:
“The basis of the housing disaster is that dwelling approvals have been declining for 10 years and immigration has been rising for 20 years, with the end result that too many individuals at the moment are chasing not sufficient homes”.
The answer, due to this fact, requires working a considerably smaller migration program the place housing and infrastructure building can preserve tempo.
In any other case, tenants will proceed to endure shortages, requiring them to pay greater rents or stay in group housing.
Advertisement
Add comment