I know you are all frothing at the mouth, hyperventilating, and patting each other on the back....
thinking that the figure of 9 times your income gets you a house.... based on the basic wage of 67,000 x 9 = 603,000
or the after tax income of 52415 x 9 =471,744 or whatever the median price of a house is, different for each capital city...
the truth is, there is no way a bank will lend that amount of money on a single income household
the maximum the banks will lend is 30% of your after tax income, or less...it used to be 25% the after tax income on 67,000 is only 52,415 @ 30% = 15,724 available to pay interest and capital take out 5000 for capital pa, leaves just 10724 for interest 10724/ .07 = 153,200 for the loan
that is a long way short of the 500,000, for the median house price the example above is for a single person, but in most cases there are at least joint owners....if the wife is not working the income available to support the loan reduces by 10,000 ...ie 52415 - 10000 = 42415 x 30% =12724
lets get real...and try a double income...same figures 52415 x 2 = 104830 x .30% = 31449 to service the loan less 5000 capital = 26449 interest divide 26449 by .07 = 264,489 loan available wow, still way short of the median price
so many on this site are simply tyre kickers, and have no idea of the reality of talking to a lender, based on actual incomes stop fantasising about a fhb getting a loan of 500,000 on an after tax income of 52,000 those low income borrowers,,,,have to save a very large deposit, or get the olds to help, and then buy a modest house out in the outer suburbs...
going by the figures above, same people would be pushing their limits, paying either 300 pw rent, for a single income family, or 500 pw for a dual income family
fhb's have never been in the market, in the best addresss in the city or suburbs...so why do some think a magical wave of a fairy wand, will entitle them today
the above figures also tie in with the average size mortgage of around 240,000 only those people on far higher incomes of 150,000 pa are in the market for the median price house
the house prices vary so much, from low 200,000 to million dollar plus pads....the median is simply the figure in the middle
btw, those figures reduce again if there are any credit cards, car loans or personal loans in existence children also reduce your income available to support a loan by 10,000 each pa.... 60,000 victorians depart the inner sububs, and escape to the outer suburbs each year
anyway you will all be saved, they are planning to build thousands of units, in the inner burbs....those prices should be more realistic, affordable for the low income earners oh, and even if prices crashed, the low income households would still not satisfy the lenders....or be able to service the debt the banks might be greedy, but they are not silly... if you doubt these figures, do yourselves a favour, front up to the banks, and get a first hand experience, in their lending practices...
