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It appears that with interest rates low and disposable income at record highs, Australians are taking on more debt in the property sector. Every quarter the Reserve Bank looks at household finances and the ratio of debt to disposable income.
Its latest data shows that household debt and housing debt has continued to climb steadily since 1988. This is likely to be because standard variable mortgage rates have plunged to a record low of around 5%, so households are prepared to take on more debt.
And that appears to be paying off with the value of assets also increasing showing that with significant debt comes substantial property asset value. This means, that while households are going into debt their housing assets remain strong, so they are not going backwards; their assets remain of higher value than their debt.
Lower interest rates and a stronger labour market over recent decades has also encouraged borrowing, yet household savings have also increased. The Reserve Bank report also shows that mortgage arrears are very low with a typical mortgage holder being two years ahead on their repayments.
Investors are looking to the property market. Research on house and unit rentals in Australia has shown some growth in all States except WA, which dropped, and QLD and Tas where it remained stagnant.
In South Australia, the greatest rental growth for houses was in Outer Adelaide where rents increased by 6.7% to $320 per week over the quarter to Dec 2015. For units, the greatest growth in South Australia was in the Murraylands where rents increased 5.1% to $330 per week over the quarter to Dec 2015.
On average in South Australia, the median house rental is $265 per week, up 1.9%, and median unit rental is $200 per week, which remained un-changed over the quarter.
The team at Amkar Real Estate will be happy to discuss your housing and investment property needs so please feel free to call us on 08 7325 7728 or e-mail firstname.lastname@example.org