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ISCOVER
Staff Reporter
It is becoming tougher for homebuyers to enter the market, as new research shows median house prices are on the rise.
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The latest Housing Market Report by Australian Property Monitors found that the national median house price climbed 2.7 per cent over the three months to January in comparison with the year before.
Across the country, Perth saw the biggest rise in its median house price compared to 12 months ago, climbing 5.7 per cent to $558,416, while Sydney recorded the biggest leap in median unit prices, with a 5.3 per cent jump.
As a result, first home buyers will now need to save an extra $1,430 for a 10 per cent deposit for a national median-priced house and an extra $810 for a median-priced unit.
RateCity’s chief executive Alex Parsons said it’s not all bad news for first home buyers who can afford the higher costs of a deposit.
“What many prospective borrowers may not realise is that when property prices rise, it doesn’t just affect your borrowing budget but also your deposit. That’s because a deposit is generally a percentage of the property value.
“But if you can afford the higher costs of the current property market, or you’re lucky enough to be buying in an area that has been stable or reduced in price, you’re in a better position to maintain a mortgage compared to last year.”
According to RateCity’s database of more than 100 lenders, the current average standard variable rate is 5.96 percent, which is 0.87 percentage points lower than in January 2012.
For the national median house price of $544,071 (excluding a 10 percent deposit), mortgage repayments have fallen by $195 per month.
“Borrowers should also aim to save at least 20 per cent of the value of the property to avoid lender's mortgage insurance,” Mr Parsons said. “The worst thing a borrower can do is rush into a home loan without an adequate deposit. It will end up costing more and can also come with higher risk. So don’t be afraid to spend some time saving for a decent deposit.”
