The $100,000 hit to potential home buyers as cost of living soars

Inflation hit 7.3 per cent in the past year and the rising cost of living is taking a toll on potential home buyers.A standard measure of borrower expenses is set to increase again this year.Potential home buyers have had their budgets cut by as much as $100,000 as banks reassess their rising cost of living.inflation pressuresThe Reserve Bank of Australia lifted interest rates by a quarter of a percentage point despite revealing it now expects the economy to slow through 2023 and 2024.

“That’s the crux of it. The cost of living goes up, the cost of housing goes up with interest rates. It’s another expenditure that is going up. That clearly has an impact.”Two Red Shoes principal and mortgage broker Rebecca Jarrett-Dalton said all her clients have been affected to varying extents, depending on the amount they want to borrow and their reported costs.

In one case, a single applicant on $70,000 a year lost $20,000 in borrowing capacity after the measure was revised up. “The [House Expenditure Measure] has changed more significantly for families than any other household, especially when someone is part-time,” Algar said.

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The $100,000 hit to potential home buyers as cost of living soarsFamilies are the hardest hit as they have more essential costs, which account for the majority of inflation pressures, and fewer ways of cutting back on non-discretionary spending. Watch the honeymoon turn sour for Albo. Labor👍🏻 Fortunately house prices are coming down accordingly
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The $100,000 hit to potential home buyers as cost of living soarsThe rising cost of essential goods and services has meant buyers have even less money to service a home loan, which is starting to affect how much they can take to auction. TawarRazaghi The Poisoned Well by The LNP
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