AUSTRALIANS have to work almost three times harder to pay off the average family home than they did 50 years ago.
Figures compiled by CommSec for The Sunday Telegraph reveal homebuyers on the average income now have to work for 19,374 hours to buy the average Australian house with the average mortgage.
Based on an eight-hour day and a five-day working week, that equates to about 10 years of work. In reality, it takes much longer to own a home, because wages must pay for all living expenses, not just housing.
In 1960, it took homebuyers just 7500 hours to pay off the average mortgage.
CommSec chief economist Craig James said that half a century ago, average wage-earners took home the equivalent of $1.08 an hour.
They needed to work 25 hours to meet the monthly mortgage repayment of $25, based on an average five per cent interest rate and a mortgage of $4620.
Today, the average worker earning $30.04 an hour spends 70.7 hours – or almost two weeks of the month – at work to cover the monthly mortgage repayment for an average $283,000 loan at a 6.64 per cent interest rate.
The figures show rising costs and growing property prices have largely outstripped wages and young couples today need to work longer and harder to achieve the great Australian dream of owning their homes.
Whereas homes were once affordable on a single wage, families now realistically need two incomes to fund a mortgage. “This is your single biggest purchase,” Mr James said. “This is where people are living.
“We’re building bigger and better homes, so it was always likely we were going to be paying more in terms of the mortgage – and we’re certainly working longer to pay for that.
“We’re working longer, but we’re probably working more flexibly and in jobs that we like.”