The average Australian mortgage has risen to a record high of $624,383, even as the Reserve Bank has hiked rates 13 times in 18 months.
The growing figure reflects the fact that Australia’s national average house and unit price has risen by more than 8 percent in a year, with record high immigration boosting property demand across the country.
Australian Bureau of Statistics lending data for December also showed the average new mortgage for owner-occupiers reached record highs in two states that are mainly gaining new residents through interstate migration.
The national average new mortgage of $624,383 in December marked an increase of 2.6 per cent from $608,448 in November – the month the RBA raised the cash rate to a 12-year high of 4.35 per cent.
The average new Australian mortgage has risen to a record high of $624,383, even as the Reserve Bank has hiked rates 13 times in 18 months (pictured is an auction in Melbourne)
RateCity calculated that a new borrower would now pay $3,836 per month in mortgage repayments, at a variable interest rate of 6.2 percent.
This would rise to $46,032 a year, assuming the RBA does not raise rates again after inflation fell to a two-year low of 4.1 percent last year.
RateCity research director Sally Tindall said borrowers were building up debt despite variable mortgage rates rising well above six per cent.
“It’s incredible to think that borrowers can afford these super-sized loans at a time when mortgage rates are largely in the 60s,” she said.
The average new mortgage of $624,383 means someone with a 20 percent down payment would buy a $780,479 home.
Australia’s median house and unit price rose 8.1 per cent to $757,746 last year, which was similar to Adelaide’s median house price of $763,606 in December, CoreLogic data showed.
This came after net migration for 2022-2023 rose to a record high of 518,000, leading to large inflows of residents into Sydney and Melbourne and extensive interstate migration into south-east Queensland and Western Australia.
Official lending data showed the average new mortgage in Queensland rose to a record high of $572,439.
With a 20 per cent deposit, this would buy a $715,549 house, which was well below Brisbane’s median house price of $875,991.
The average new mortgage in South Australia also stood at a record high of $519,478, which would buy a $649,348 home with a 20 per cent deposit.
Western Australia’s average new mortgage hit a record high of $509,275, which would buy a $636,594 home with a 20 per cent mortgage deposit.
Perth’s average house price rose 15.6 per cent to $691,100 last year.
New South Wales still had the highest average new mortgage at $785,405, which would buy a $981,756 home with a 20 percent deposit.
This was well below the median house price of $1.4 million in Sydney.
The national average new mortgage of $624,383 in December marked an increase of 2.6 per cent from $608,448 in November – the month the RBA raised the cash rate to a 12-year high of 4.35 per cent (pictured a branch of the Commonwealth Bank in Sydney)
Victoria’s average new mortgage of $613,018 with a 20 per cent deposit would buy a $766,273 home, which would be well below Melbourne’s average house price of $948,041.
The Reserve Bank of Australia announced this on Tuesday left the cash interest rate at a twelve-year high of 4.35 percent on Tuesday afternoon.
But Governor Michele Bullock has dismissed any suggestion of a near-term rate cut – and in fact suggested a possible rate hike – even as headline inflation fell to a two-year low of 4.1 percent in 2023.
“Inflation continued to decline in the December quarter. Despite this progress, inflation remains high at 4.1 percent,” she said on behalf of the RBA board.
The Reserve Bank of Australia left the cash interest rate unchanged at a twelve-year high of 4.35 percent on Tuesday afternoon. But Governor Michele Bullock has dismissed any suggestion of a rate cut anytime soon – essentially suggesting a possible rate hike.
“The interest rate path that will best ensure inflation returns to target within a reasonable timeframe will depend on the data and evolving risk assessment, and a further rise in interest rates cannot be ruled out.”
Following review, the RBA will hold eight two-day meetings in 2024 instead of eleven monthly meetings.
Economists had expected the RBA to leave rates unchanged this month, while the 30-day interbank futures market expected a rate cut in August, which would be the first easing since 2020.