RBA Urges Housing Expansion Amid Record Mortgage Highs
A significant rise in the average mortgage across Australia has prompted the Reserve Bank of Australia (RBA) to advocate for increased housing construction. With the average mortgage reaching nearly $750,000, the RBA emphasizes that building more houses is essential to address escalating property prices.
Current Mortgage Landscape
Recent data from the Australian Bureau of Statistics highlights striking trends in mortgage figures:
- The average mortgage across Australia has surged to $736,000.
- New South Wales leads with an average mortgage of $873,000.
- Queensland saw an increase of $101,000 in 2025, bringing the average to $736,000.
- For the first time, every Australian state and territory has an average mortgage above $500,000.
Fluctuations in First-Time Buyer Activity
The mortgage market is heavily influenced by first-time buyers and investors who are pushing prices to new heights:
- In the last quarter, first-time buyers accounted for nearly 32,000 mortgages, the highest number since early 2022.
- The number of loans for this segment increased by 9.1% in the previous year.
- Loan values for first-home buyers rose by 15% recently.
JPMorgan economist Tom Ryan notes that the average mortgage for new buyers jumped by 8.5% in just three months. This uptick correlates with the federal government’s initiative to extend the 5% deposit scheme for first buyers, allowing them to secure larger loans.
Impact of Economic Policies
Despite increasing mortgage sizes, there is anticipation of future interest rate hikes. The RBA’s deputy governor, Andrew Hauser, believes the country must increase housing supply:
- Hauser stated that while Australia builds a considerable number of homes, it must increase this capacity further.
- Economists expect rates may rise again, but the impact on the housing market may be limited.
Commonwealth Bank CEO Matt Comyn commented on the probability of rate hikes, stating their effect would be minimal for households already facing economic pressures.
Governmental and Economic Factors
The tension between government spending and interest rate policies remains a critical discussion point. According to Treasury secretary Jenny Wilkinson:
- Federal spending has dropped below expectations, which had unintended implications for inflation.
- A sudden increase in business expenditure and household spending has contributed to inflation rates.
Overall, while the economy shows resilience, enhancing productivity and housing availability is crucial for long-term stability.
