Mortgages 'more popular in NSW'

By the resi financial blog team, 25 November 2013

Mortgages popular in NSW

People may be starting to take advantage of the best fixed interest rates in New South Wales (NSW), with the state experiencing the biggest jump in homes owned through a mortgage in the country over a five-year period.

New research from the Australian Bureau of Statistics (ABS) found 33.4 per cent of dwellings fell under this category in 2011, compared with 31.9 per cent in 2006.

While this was the largest increase across all states and territories, the Australian Capital Territory (ACT) had the highest percentage of homes owned through a mortgage, with just below 39 per cent.

Overall, the number of people who owned their homes fell over the five-year period from 68.1 per cent to 67 per cent - however, this was largely due to a fall in the proportion of individuals who owned their dwelling outright.

The number of people who had mortgages actually increased slightly from 34.1 per cent to 34.9 per cent, with the figures rising in all states and territories except the Northern Territory. 

Median repayments on the rise

Whether people take a variable or fixed home loan, it appears median mortgage repayments are also increasing annually.

However, the ABS was quick to point out that this is not necessarily because taking out a mortgage is becoming more expensive.

In fact, the organisation said it could reflect the fact that an increasing number of people are choosing to pay off their mortgages more quickly by voluntarily bumping up their payments.

"Mortgage costs in Australia have changed over the five years from 2006 to 2011, with median monthly mortgage repayments increasing from $1,300 in 2006 to $1,800 in 2011, an increase of 38.5 per cent," it added.

Mortgage repayments were highest in the Northern Territory and the ACT, both of which reported monthly amounts at over $2,000.

NSW had the slowest growth, with repayments climbing 31.4 per cent between 2006 and 2011, compared with 58.3 per cent in the Northern Territory.

Local government area differences

Certain local government areas (LGA) showed higher percentages of mortgage ownership across Australia, depending on several factors.

These included access to amenities, employment opportunities and the cost of construction and land purchase.

"The LGAs in Australia with the highest proportions of homes owned with a mortgage were characterised by urban expansion and growing populations, located on the fringe or outer areas of capital cities," the ABS explained.

"Of the ten LGAs with the highest proportion of homes owned with a mortgage in Australia, four were located in Victoria, three in Western Australia, two in South Australia and one in New South Wales; all with a proportion over 50 per cent."

The LGA with the highest proportion of mortgaged homes was Serpentine-Jarrahdale in Western Australia at 55.3 per cent.

Categories: Home Loans