Powered by MOMENTUM MEDIA
realestatebusiness logo

Subscribe to our newsletter

Lending curbs to see average Sydney deposit hit $369,542

APRA’s latest effort to control the mortgage market will force the average Sydneysider to fork out a $369,542 deposit for a median-priced house in their hometown.

In a recent letter to all Australian ADIs entitled Embedding Sound Residential Lending Practices, APRA indicated that lenders need to limit lending at very high debt-to-income levels.

“APRA expects ADIs to commit to developing internal risk appetite limits on the proportion of new lending at very high debt-to-income levels (where debt is greater than six times a borrower’s income) and policy limits on maximum debt-to-income levels for individual borrowers,” the regulator said.

CoreLogic analyst Cameron Kusher said that this doesn’t suggest that there is any hard limit on loan-to-income (LTI) ratios above six times, but it does suggest that there will be less appetite for mortgages which are in excess of six times incomes.

Advertisement
Advertisement

Utilising gross household income data that has been modelled by the Australian National University (ANU) Centre for Social Research and Methods, CoreLogic considered what the impact of limiting debt-to-income ratios to six times would be.

“Six times the median gross household income in Sydney is calculated at $688,764. The median house value in Sydney is $1,058,306 and the median unit value is $774,124,” Mr Kusher said.

“What this means is that if a buyer wanted to purchase the median house under this scenario, they would need a deposit of $369,542 and for the median unit they’d need a deposit of $85,360.”

Mr Kusher noted that the high median value relative to incomes implies the typical Sydney household would probably be targeting properties across the lower quartile of values rather than around the middle of the valuation range.

Lending curbs to see average Sydney deposit hit $369,542
mortgagebusiness

Latest News

The Mortgage Business Uncut podcast is your weekly analysis of the biggest themes shaping the Australian mortgages market. ...

Members of the broking industry have welcomed the appointment of Anja Pannek as the new chief executive of the Mortgage & Finance Associ...

Business credit applications declined 2.0 per cent in the June 2022 quarter, marking the first fall in five quarters, according to Equifax. ...

VIEW ALL

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

Do you think the new NSW property tax will help or hinder first home buyers?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.