Worst ever housing affordability spruik gets worserer

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Stephen Koukoulas (“the Kouk”) has once again claimed that housing affordability is no worse today than 20 or 30 years ago:

As usual, The Kouk has focused on one thing only – initial mortgage repayments – while ignoring all other factors, including:

  • The size of the deposit required;
  • Repayment size over the full 25 to 30 year loan term; and
  • How long it take to repay the mortgage.
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I comprehensively debunked the Kouk’s faulty methodology in 2016.

CoreLogic has also debunked The Kouk’s claim, showing that the number of years required to save a deposit has ballooned:

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In short, today’s home buyer are facing a difficult loan repayment schedule due to the combination of high home prices, low inflation and low income growth.

Because of these factors, a massive mortgage today will remain a very big mortgage in a decade’s time.

Der.

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About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.