The findings of this report makes sense. Mortgage rates have collapsed below 3% for new owner-occupied borrowers:
New mortgage rates for owner-occupiers are below 3%.
At the same time, gross rental yields outside of Sydney and Melbourne are above 4%:
Gross rental yields are well above mortgage rates outside of Sydney and Melbourne.
The big issue, however, remains saving for a deposit. This helps to explain why borrowing from parents – the ‘Bank of Mum & Dad’ – has hit a record high 60% of first home buyer mortgages, with the average parental assistance totalling around $90,000:
A record share of first home buyers are receiving financial assistance from their parents.
Repaying one’s mega-mortgage has also become increasingly difficult due to record low inflation and wage growth.
Thus, it may never be cheaper in most markets to service a mortgage, but never more expensive to save for a deposit or pay off the loan.
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.
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