The Australian’s Jess Malcolm has published an article in The Australian claiming that Australian mortgage holders are suffering more than renters, since mortgage repayments have risen much faster than rents.
“Mortgage interest repayments have risen nine times as fast as rental costs in the past year, with economists saying the economic pressure of rate rises is being felt acutely by homeowners rather than renters”, the article reads.
“Analysis of figures from the Australian Bureau of Statistics has found mortgage interest payments have doubled from nearly $11bn to above $22bn in the latest March quarter following 12 rate rises by the Reserve Bank of Australia”.
“This compares with a $1.3bn increase in rental costs, the national spend on rent rising from $18bn to $19.3bn in the March quarter”.
“In the past year, it’s clear that mortgage costs have gone up a lot more than rents”, claims Judo Bank’s Hogan.
“This shows the cash flow pressures from rate rises are being felt much more on households with a mortgage than those that rent”, he said.
“This shows where the pressure is being brought to bear, and mortgage holders are really feeling the burden a lot more than renters in terms of the cost of housing”. argued Hogan.
Source: Judo Bank (via The Australian)
Opposition housing spokesman Michael Sukkar also took the opportunity to label mortgage holders the new “working poor”.
As he often does, independent economist Tarric Brooker destroyed the claim with a Tweet:
I will add that Roy Morgan’s 2023 Wealth Report, released this month, showed that renters have fallen far behind homeowners.
According to this report, Australia’s wealth increased by 7.0% between March 2020 (pre-COVID) and March 2023.
This wealth increase was driven primarily by the rising value of owner-occupied homes, which increased by 43.2%, from $4.16 trillion to $5.95 trillion.
Half of the population – primarily homeowners – currently account for 95.4% of Australia’s net wealth.
By contrast, the lowest half of the population – primarily renters – also saw their wealth share rise, but only from 3.6% to 4.6%.
The fact of the matter is that renters tend to be poorer and earn lower incomes.
Therefore, they are hit harder on average by rising rents than home owners are by rising mortgages.
Although there are always exceptions in both cases.
