The joy and excitement of owning a new home has run dry for anyone who bought property in the last four years.
According to a new report, more than 35% of Aussies who have bought a home since 2008 now owe more money on their home than what it is worth.
This gloomy state of affairs isn’t set to improve anytime soon with analysts predicting homes could stay in negative equity for the next six years, with property prices expected to remain soft for the foreseeable future.
The national rate for negative equity has increased sixfold in the last four years from 6% in 2008 to 35.6% today.
But Aussies looking to enter this affordable market don’t escape the barrage of bad news.
Since the Global Financial Crisis banks have toughened their lending requirements leaving many potential buyers locked out of the market.
The number of written mortgages has gone from 60,000 in 2008 to 45,000 this year and not only is the number of new mortgages decreasing, but so is the value of the approved loans.
While Aussies are borrowing less, the average home price has risen from $375,000 to $412,000 in the past 4 years.
The volatile property market has seen trends in Aussie spending habits change with more people saving for larger deposits and avoiding investing in property all together.