Proportion of homes with mortgage on the rise

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By Robert Carry

The report The proportion of Australian households currently mortgaged has increased to 35%, up from around 30% a decade ago, a new figures from the Australian Bureau of Statistics (ABS) have revealed.

The ABS figures also showed that the proportion of people owning their homes dropped from 40% to 33% over the decade.

According to Craig James, CommSec chief economist, the number of people owning their homes outright in the mid-1990's far outnumbered homebuyers and renters. However, the proportions are now on par with the largest group being those paying off home loans.

However, James also warned of the potential dangers of interest rate increases. He continued, "The economy has become far more sensitive to higher interest rates with the proportion of people owning their homes outright continuing to slump."

The economist added that this had made Australia more sensitive to rate hikes, "a fact that must be taken into account by the Reserve Bank in deliberations on the cash rate".

The figures also showed a sharp jump in the number of people living in apartments over the past two years and that couple-only families now outnumber couples with children.

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