Average Australian Mortgage Size in 2023
29 Nov 2023
Australians spend a fair bit on rent. According to the March 2023 Domain Rental Report, the median property across the eight capital cities costs more than $400 per week.
In more expensive cities like Sydney, rent can easily exceed $640 a week. The table below shows a breakdown of the median rent across each capital city in Australia at the moment.
|City||Median rent (averaged between units and houses)||Average weekly salary (by state and territory)||Rent as a % of weekly salary|
Units actually cost less to rent on average than houses. The table above shows the median between the two categories, while the one below shows the difference:
Source: Domain March Rental Report
So, while some rentals appear to be quite reasonably priced, the reality is they can be very expensive for the majority of Aussies, with the average person spending over 30% of their income on rent each year. Someone renting a house in Sydney could spend an average of 35.36% or more of their income on rent!
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This figure looks even bigger when you extrapolate it to a monthly figure. That median rent figure of $557.5 per week, multiplied by 4.34 (the average number of weeks in a month) becomes $2,419.55 per month. The cheapest (Adelaide) and most expensive (Sydney) cities to rent in would cost a median of $2,039.8 and $2,777.6 respectively.
If you’re paying too much in rent, consider employing the following tactics:
Of course, you could actually pay less in rent by buying a home and taking out a good value home loan to pay for it…
Renting instead of owning a home does have some benefits, of course, but if you can afford to do so, it’s definitely worth considering buying a home instead of continuing to rent.
First of all, renting isn’t always cheaper, despite what you might have heard. The median monthly rent as discussed above is more than $2,419.55 per month.
If, for example, you took out a $400,000 home loan at a rate of 5.35% p.a. (principal and interest repayments, 30-year loan term) your monthly repayments on that loan would be $2,233.65 per month, less than that median rental cost.
Of course, there are other costs associated with buying a home, such as stamp duty, not to mention the difficulties many people face actually saving up for a deposit. But once you’ve got a foot in the proverbial door, owning your own home can be much more beneficial, as those mortgage repayments are going towards paying off an asset that will one day become 100% yours, one you could either sell for profit or keep for future generations.
It’s important to find a good value home loan to make buying over renting worthwhile.
Related: Buying vs Renting
You should ideally look for a home loan with a low-interest rate, low fees and a good range of product features with easy online access and support.
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