4 ways owning a home in the 80s was different to owning one today

We travel back in time to 1984.

Last updated:

In a recent finder.com.au study, we compared various home ownership factors of 1984 - the average mortgage size in relation to income, mortgage repayments, interest rates, and property prices- with the same factors today to discover that despite the higher costs of living that we currently face, Australians are still taking out mortgages to pursue homeownership.

home loans in the 80s vs today infographic

1. Mortgage Sizes

The average mortgage size for Baby Boomers in 1984 was twice the amount of their average income, whereas today our mortgage size is quadruple the amount that we earn.

The average mortgage size in 1984 was $37 542 with an average annual salary of about $19 000. Whereas today, the average mortgage size is $334 000 with an average annual income of $79 000.

In 1984, 23% of your income would have gone towards your home loan, whereas now 29% of your income will go towards your home loan.

The average mortgage has increased by 790% but the average income has only increased by 316% over 30 years.

This trend has given rise to many borrowers experiencing mortgage stress, which occurs when your mortgage repayments constitute 30% or more of your total annual income.

2. Mortgage Repayments

Monthly mortgage repayments are four times higher than what they were 30 years ago- rising from $372 to $1 896.

3. Interest Rates & Property Prices

In 1984, you would have seen a higher interest rate. Today, on the other hand, the Reserve Bank has continued to ease monetary policy by lowering rates, making home finance cheaper, which has played a part in fueling demand and higher housing prices.

finder.com.au money expert, Michelle Hutchison says: "The concerning part is that interest rates are half of what they were 30 years ago, with the average standard variable rate currently about 5.5 percent compared to 11.5 percent in 1984."

The average Australian property value currently sits at $580 000 compared to $66,042 30 years ago. With the Reserve Bank’s easing of monetary budget, lower interest rates have contributed to the fuelling of Australian property prices.

4. Rent VS Buy

In 1984, 8% of the population rented and now 10% of the population rent. On the contrary, there has been a more significant change in the number of Australians taking out a mortgage, from 4% to 12% over 30 years.

Despite the tough conditions for Australian homeowners, such as increased mortgage sizes in relation to annual income, and escalating property prices, we have still seen a rise in the number of people taking out a mortgage. Four times more households today are taking out a mortgage when compared to 1984.

Michelle Hutchison points out that property is still a worthwhile investment: “If this trend continues, homeowners can expect the average property of $580 000 to be worth $4.6 million in 30 years time.”

“Even if it takes you another five years to save for a deposit, it’s worth getting into the property market when you can if you compare it to the past 30 years of returns.”

Scanning over the past 30 years of returns and with historically low interest rates, property is still a valuable investment in Australia’s market.

*This research is based on projected estimates and actual figures from Australian Bureau of Statistics, Australian Taxation Office, Reserve Bank of Australia and analysed by finder.com.au.

Need a home loan? Start comparing

Aussie Home Loans Logo

Start your home loan application with expert help from Aussie.

By submitting this form, you agree to the Finder Privacy and Cookies Policy and Terms of Use

Applications are subject to approval. Conditions, fees and charges apply. Please note that you need to be an Australian citizen or permanent resident to apply.

Credit services for Aussie Select, Aussie Activate and Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 (“Aussie”) and its appointed credit representatives, Australian Credit Licence 246786. Credit for Aussie Select products is provided by Residential Mortgage Group Pty Ltd ACN 152 378 133, Australian Credit Licence 414133 (“RMG”). RMG is a wholly-owned subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124 AFSL and Australian Credit Licence 234945. Credit for Aussie Activate products is provided by Pepper Finance Corporation Limited ACN 094 317 647 (“Pepper”). Pepper Group Limited ACN 094 317 665, Australian Credit Licence 286655 acts on behalf of Pepper. Credit services for Aussie Elevate products are provided by AHL Investments Pty Ltd ACN 105 265 861 Australian Credit Licence 246786 (“Aussie”) and its appointed credit representatives. Aussie is a trade mark of AHL Investments Pty Ltd ABN 27 105 265 861. Credit and any applicable offset accounts for Aussie Elevate are issued by Bendigo and Adelaide Bank Limited ABN 11 068 049 178 AFSL / Australian Credit Licence 237879.

Aussie is a trade mark of AHL Investments Pty Ltd. Aussie is a subsidiary of the Commonwealth Bank of Australia ABN 48 123 123 124. ©2019 AHL Investments Pty Ltd ABN 27 105 265 861 Australian Credit Licence 246786.

By submitting this form, you agree to the Aussie privacy policy.

An Aussie mortgage broker can find the right home loan for you.

  • FREE Suburb and Property Report with every appointment.
  • Access 3,000+ loans from over 20 lenders.
  • Get expert help with your loan application, including paperwork and eligibility.

Aussie Home Loans Lender Logos

The Adviser’s number 1 placed mortgage broker 7 years running (2013-2019)

Rates last updated December 13th, 2019
$
Loan purpose
Offset account
Loan type
Repayment type
Your filter criteria do not match any product
Name Product Interest Rate (p.a.) Comp Rate^ (p.a.) Application Fee Ongoing Fees Max LVR Monthly Payment Short Description
St.George Basic Home Loan - LVR 60% to 80% (Owner Occupier, P&I)
2.99%
3.01%
$500 (waived for loans above $150,000)
$0 p.a.
80%
Online only cashback offer: Refinancers borrowing $250,000 or more can get a $4,000 cashback for their first application (Other terms, conditions and exclusions apply). Buyers and refinancers can get this competitive variable interest rate. Application fee waived for loans above $150,000.

UBank UHomeLoan Variable Rate - Discount offer for Owner Occupiers, P&I Borrowing over $200,000
2.84%
2.84%
$0
$0 p.a.
80%
Enjoy flexible repayments, a redraw facility and the ability to split your loan. Plus, pay no application or ongoing fees.
Suncorp Back to Basics Home Loan - Better Together Special Offer $150k+ LVR<=90% Incl. LMI (Owner Occupier, P&I)
3.03%
3.04%
$0
$0 p.a.
90%
Get one free online redraw per month and pay no ongoing fees. Application fees are waived for loans above $150,000.
loans.com.au Smart Home Loan - (Owner Occupier, P&I)
2.88%
2.90%
$0
$0 p.a.
80%
Get one of the lowest variable interest rates on the market and pay 0 application or ongoing fees.
Tic:Toc Live in 10% deposit Variable Rate - Principal & Interest
2.79%
2.80%
$0
$0 p.a.
90%
Get a very low interest rate and pay no application, settlement or valuation fees. Apply online for full approval in real time and add a 100% offset account for $10 a month.
Virgin Reward Me Fixed Rate Home Loan - 2 Year LVR < 90 (Owner Occupier, P&I)
3.44%
3.39%
$0
$10 monthly ($120 p.a.)
90%
Enjoy a competitive fixed rate with no application fee.
Bank of Melbourne Basic Home Loan - LVR above 60% up to 80% (Owner Occupiers, P&I)
2.99%
3.01%
$500 (waived for loans above $150,000)
$0 p.a.
80%
Online cashback offer: Refinancers borrowing $250,000 or more can get a $4,000 cashback for their first application (Other terms, conditions and exclusions apply). A low variable interest rate for home buyers and refinancers. Application fee waived for loans above $150,000.
Tic:Toc Live in Loan Fixed Rate Home Loan - 3 Year (Owner Occupier, P&I)
2.84%
2.92%
$0
$0 p.a.
90%
Apply online and get fast approval for this fixed rate, low-fee loan with redraw facilities. Add a 100% offset account for $10 a month.
State Custodians Low Rate Home Loan with Offset - LVR up to 80% (Owner Occupier, P&I)
2.90%
2.92%
$0
$0 p.a.
80%
This loan offers a competitive variable rate and a 100% offset account to help save you on interest repayments.
Bankwest Complete Home Loan Package Variable - $200k+ LVR <=80% (Owner Occupier, P&I)
3.05%
3.50%
$0
$395 p.a.
80%
A low variable rate loan with a 100% offset account and package discounts.

Compare up to 4 providers

Was this content helpful to you? No  Yes

Related Posts

Ask an Expert

You are about to post a question on finder.com.au:

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • finder.com.au is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Ask a question
Go to site