The average size of the Australian home loan has increased by 376% over the past 25 years

I know there is a lot of fuss made about housing affordability.

Believe it or not…the average size of the Australian home loan has increased by 376% over the past 25 years according to Aussie’s 25 year property trends report

Despite loan sizes increasing approximately in line with the housing cycles, mortgage rates have fallen dramatically over the same time frame, which has resulted in improved levels of mortgage affordability.

The report shows that the average owner occupier loan size has broadly increased in line with dwelling values across Australia, with the typical loan size reaching $388,100 in 2018.

Here’s an extract from the report:-

A1

A2

Source: CoreLogic, ABS.

Housing Loans

The average size of a mortgage across Australia has increased roughly in line with dwelling values over the past quarter of a century, with the annual rate of increase tracking at 6.4% per annum compared with national house values rising at 6.8% per annum and national unit values rising at 5.9%.

The average loan size for owner occupiers across Australia, based on data to March 2018, was $388,100, having increased from just $81,500 twenty five years ago.

It’s not surprising to see a wide range in the average loan size between the states which is reflective of the diversity in housing values.

Highest value loans in NSW

The largest loan sizes are originating in New South Wales where housing values tend to be the highest, while average loan sizes are the smallest in Tasmania at just $252,100.

A3

Source: CoreLogic, RBA.

Despite loan sizes increasing approximately in line with the housing cycles, mortgage rates have fallen dramatically over the same time frame, which has resulted in improved levels of mortgage affordability.

Twenty five years ago, the average standard variable mortgage rate was recorded at 10.0% compared with an average standard variable mortgage rate of 5.2% in April 2018.

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About

Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and his opinions are regularly featured in the media. Visit Metropole.com.au


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