Buying a house can be risky behaviour for some

Australians are engaging in increasingly risky behaviour because they are seduced by the dream of home ownership said Professor Wilson-Evered, director of research at Relationship Australia Queensland.

Sydney University anthropologist Stephen Juan said “many Australians will do almost anything to purchase a home. They will often take out loans far beyond their ability to repay them.”

The average home loan size for first home buyers was $285,000 in January 2010 - up one third over five years, while average full time weekly earnings increased 21%. Home prices are expected to increase between 8 and 12 per cent this year after jumping 13.6 per cent in 2009. Home loan repayments are up about $200 a month on an average $300,000, 25-year home loan since the Reserve Bank's rate-rise cycle began in October 2009. Another $200 per month in repayments is expected by the end of 2010.

Before you get a home loan, make sure you are able to make home loan repayments in the event of further interest rate increases. A mortgage broker can help you source and research home loans and ensure you are ready to own a home.