Home Loans Crack 25pc Of Family Income Ceiling

The average family is spending more than a quarter of its gross income on home loan repayments, and NSW families are among the worst affected.

Average monthly home loan repayments for NSW families are $698, second to the ACT, which is $718. In Western Australia, repayments are $495 a month.

A report on home-loan affordability, released yesterday by the Real Estate Institute of Australia and the Mortgage Guarantee Insurance Corporation of Australia Limited (MGICA), shows that while family incomes are growing in response to consumer price index increases, the growth in loan repayments is outpacing them.

The Federal Opposition spokesman on housing, Mr Julian Beale, said the report confirmed that young families in particular had seen their standards of living dramatically reduced.

Over the past two years savings bank home loan interest rates had risen by up to 52 per cent, he said.

New home buyers were now facing crippling savings bank loan rates of up to 17.5 per cent, compared with 11.5 per cent in the Hawke Government's early years.

"The Government's deliberate high interest-rate policy has sharply reduced the living standards of ordinary Australians," Mr Beale said.

A survey of home loan repayments for the 1986 September quarter showed that repayments throughout Australia averaged 26.7 per cent of average family income, well above the benchmark affordability level of 25 per cent.

This was only a small increase on the June quarter figure of 26.5 per cent, but a substantial increase on the March quarter figure of 21.3 per cent. Compared with the 1985 September quarter, average monthly home repayments rose by 35 per cent in Tasmania, 28 per cent in South Australia and 24 per cent in Victoria.

Repayments in Western Australia rose 23 per cent, in NSW 21 per cent, in Queensland 18.3 per cent and in the ACT 12 per cent.

The average price of an established home in Perth at $54,600 is significantly lower than anywhere else in Australia. This corresponds to the$495 average monthly loan repayment in WA, compared with $698 in NSW.

For other States and territories, the repayments are: Tasmania $468; South Australia $622; Victoria $609; Queensland $532; and Canberra $718.

The managing director of MGICA, Mr Peter Bradford, said housing loan funds had remained readily available over the period, but continuing high interest rates were inhibiting buyers.

He said an improvement in housing sector activity could not be expected until there was a fall of at least 2 per cent in interest rates.

MORTGAGE

REPAYMENTS SOAR

State Av. monthly Increase

repayment over 12 mths

ACT $718 +12%

NSW $698 +21%

S.A. $622 +28%

Vic. $609 +24%

Qld $532 +18%

W.A. $495 +23%

Tas. $468 +35%