Underscoring the nation’s problem with housing affordability, a new survey of home owners and aspiring first home buyers shows one in five first home buyers used more than 50 per cent of their income to service their debt.
The survey, conducted by mortgage insurance provider Genworth, revealed the average age of first home buyers has risen to 31 years, up from 25 years in the seventies.
“The average age of a first home buyer is increasing in Australia,” Alan Shields, a research director at Retail Finance Intelligence, said on Thursday.
“Does that mean in 2040, the average age of the first home buyer is going to be 38 or 39?
“Quite possibly, unless we can do something about it to address affordability issues.”
Among 9,000 people surveyed across eight countries, including Canada, India, Ireland, Italy, Mexico, the United Kingdom and the United States, the average age of first home buyers was 31 years.
Italy and Mexico were significantly above the average for 2000 to 2011.
Australian home owners were among the most indebted in the world, but most had no trouble meeting monthly repayments on their mortgage in the last year, according to the research.
On average, 45 per cent of Australian home owners’ after tax income goes to paying off debts, well above the average of 38 per cent in the other countries surveyed.
“Whether for financial or cultural reasons, Australians are the most relaxed about being highly leveraged, with one in three comfortable borrowing more than 80 per cent of their home’s value, the highest proportion of the eight countries surveyed,” Genworth Australia chief executive Ellie Comerford said.
The biggest concern for Australian first home buyers was the rising cost of living, followed by housing affordability and interest rates, which have stayed at 4.75 per cent since November 2010.
The findings come after the release of an RP Data housing survey which showed property values fell in Brisbane and Perth over the past year and gain in Sydney and Melbourne.
In a positive sign for the housing sector, official figures released this week showed the number of home loans approved in April rose almost five per cent, led by owner occupied housing.
The Genworth research indicates that Australians go to great lengths to service their debts, with around 80 per cent of homeowners having “no trouble” meeting their mortgage repayments in the last 12 months.
As well, 45 per cent overpaid on their repayments, well above the average of 26 per cent in the other surveyed markets.
“We don’t get into trouble to the extent that they do in the other countries,” Mr Shields said.
Article | AAP