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Mortgages going down faster but first-home buyers struggling
By Tammy May

Australia's housing challengeA new report has found that Australians are paying down their mortgages faster. A quarter of Australians own their home outright, compared with 16 percent in 2007 and more people are saving again.

The trend is attributed to a number of factors. Firstly, record-low interest rates (at 10 March 2015, the Reserve Bank’s official cash rate is 2.25 percent) are making repayments more affordable. This is coupled with tighter lending rules and more conservative consumer behaviour since the global financial crisis which sees more Australians opting for saving and debt reduction over spending. The ageing population also means that a greater number of older Australians are paying off their mortgages.

But unfortunately it’s not all good news. In many suburbs, house prices have been rising much faster than wages, while low interest rates and changes to the law that let people invest in property with their superannuation have increased competition for the types of properties generally sought by first-time homebuyers. The result is even tougher conditions for first-timers to get their foot in the market.

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