The size of an average home loan in Australia seems to be growing faster than
the corresponding increase in property prices and wages.
This inconsistency is especially apparent in western Sydney and Newcastle where
buyers are pushing budgets to the brink.
In Sydney, the biggest increases in loan size, relative to median real estate
values have been in Liverpool, Fairfield and Parramatta.
The smallest have been in Ryde, Hawkesbury and Neutral Bay.
People are trying to push themselves more and more in order to purchase a home.
Even in today’s market with lenders phasing out high lvr loans, we receive
daily requests for 100% plus home loans. Unfortunately the maximum mortgage that
a borrower can qualify for today, is to 95% of the value of their home.
To obtain such a loan one must have a clean credit history and a stable history
of employment.
In Liverpool, the average loan size has surged by more than 100 per cent since 2002,
from $167,000 to $340,000. However median values in Liverpool have risen barely
20 per cent in that time from $342,000 to $415,000.
In Fairfield, the typical mortgage at the end of 2009 was $390,000 compared to
$229,000, an increase of more than 70 per cent compared to seven years earlier.
But prices have only improved by 20 per cent.
In Parramatta, the average loan today is also $390,000, up from $211,000,
a leap of 85 per cent — whereas median property values have gained just
25 per cent to $494,000 from $395,000.
In Newcastle, new mortgage debt has mounted faster than anywhere in Sydney,
up 116 per cent to $357,000 from $166,000.