Aspiring home buyers in Melbourne could pay an extra $115,000 to secure a house with a fourth bedroom, making the cost of extra space prohibitive to some buyers. The typical four-bedroom house would work out to an extra $549 a month in mortgage repayments compared with the typical three-bedroom house. The median price of a four-bedroom house in Melbourne hit $900,250 in the June quarter after a 1.
2 per cent rise over the past year, Domain data shows. This compares with the typical three-bedroom house, up 1.9 per cent in a year to $785,000.
That fourth bedroom now costs an extra $549 a month in mortgage repayments, assuming the buyer has a 20 per cent deposit on a loan taken out over 30 years. The price difference between a two and three-bedroom house is a more modest $65,000, as the typical two-bedder costs $720,000. Experts say bigger homes are now more of a luxury item, with the price difference offering clues about the location of the home and the size of the block.
It’s forcing budget-strapped home buyers to either buy further afield or compromise on space. For Melbourne marketing professional Sarah De Rango, the cost of an extra bedroom meant she and her partner, an accountant, were forced to choose between space or lifestyle on their first home – and in the end, they chose lifestyle. First home buyer Sarah De Rango chose location over extra space.
Credit: Chris Hopkins Armed with a budget of $850,000, the couple spent a couple of months pounding the property pavemen.