Source: MIL-OSI Submissions
Once aspiring homeowners have raised their deposit and actually made a purchase, servicing the average mortgage is cheaper (relative to income) than it has been in the past – 31% in Q3 2020, versus the average of 36%. The problem, of course, is getting that deposit together in the first place – currently taking 8.6 years of saving, versus the average of 7.5. In other words, these refreshed affordability measures help to illustrate a widening gap between existing homeowners and aspiring buyers, which is a key part of why the market has recently got so political so quickly.
The politics of the residential property market have certainly heated up in the past few weeks (and probably earlier in this cycle than we’ve seen in the past), no more clearly illustrated than by the exchange of letters between the Government and Reserve Bank about what can be done to restrain house prices. There are many relevant issues, but a key one is the debate around inequality in the ma