Affordability of servicing properties is now at its worst levels on record. Reports MortgageBusiness, James Mitchell
“As a result, the net costs involved in servicing a housing investment (investment loans costs less rental income) have increased relative to household incomes, making investment properties less affordable,” the report said. The report highlighted that low rental yields combined with deteriorating affordability “increase the risks and default probability for Australian residential property investors and therefore for Australian RMBS backed by loans on residential investment properties.
Click here to view the orignal article
Date: April 13, 2016 at 7:56 PM
Published by: mortgagebusiness.com.au
Reporter: James Mitchell
Video: Watch on YouTube - Watch on YouKu
Category: Australia Real Estate
“The affordability of residential investment property – defined as the net cost of servicing a residential property investment as a percentage of net household income – is at the worst level on record for investments in houses in Sydney and houses and apartments in Melbourne, and the worst in 10 years for investments in Sydney apartments,” it said.
Moody’s calculated that investors in Sydney houses require 39.6 per cent of net household income to service their investment properties, while Melbourne house investors require 26.5 per cent, both record highs.