Buying and Borrowing in Adelaide: Mortgage Commitments of Home Buyers, 1986

In April 1986 housing finance allocation procedures were deregulated. The impact of this decision on levels of finance borrowed by households was assessed for 2562 buyers of houses and home units in the Adelaide Statistical Division during May and June 1986. Sales price and mortgage data suggest two tendencies influencing the relationship between price and mortgage. Firstly, low price purchasers have small deposits and borrow heavily to effect their purchase. Secondly, high price buyers, with large deposits, are nevertheless taking out large loans to finance housing. Levels of gearing show market socio-economic bias, low cost buyers being more likely to be overcommitted.