Why younger generations have a point when it comes to the ‘cost’ of buying a home
The lifetime ‘cost’ – not the purchase price – of buying a home has increased by 130 per cent over two generations.
Matt Lloyd-Cape, Director of Policy and Research at Per Capita Australia, told Tom Elliott there was no doubt mortgage repayments were much harder to meet than they were in the past.
“What we saw that in the past was that the first few years were often really steep – people would be paying a lot in the first few years – but as their wages went up, the value of their debt would erode away and by the time they get to the last 10 years of their mortgage, they’d be paying very little on their mortgage,” he explained on 3AW Drive.
“But over the last 30 years or so, that just hasn’t been the case and the cost of the mortgage and proportion of wages is hovering at a much higher rate.”
Press PLAY below to hear him explain what’s changed
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