Housing Affordability in Australia: How to Own Your Own Home in 2019
- 27 November 2018
A recent study by SCA Research & Insights found that up to 65 percent of Australians consider housing to be too difficult to afford in today’s market. In fact, housing affordability is more likely to be a worry than employment and healthcare for many Australians. Despite this, the Australian dream of owning a home is far from over, with over 96% of Aussies still regarding home ownership as a goal.
So, with housing prices in many of our major cities seeming to boom endlessly, can everyday Australians still afford to own their own homes? In this article, we uncover some simple, straightforward steps that can help turn the dream of homeownership into a reality.
Budgeting, unsurprisingly, is the most important step when it comes to saving for a home loan deposit and being able to afford the ongoing mortgage payments. Creating and sticking to a strict budget can not only help you to save money initially but will give you an insight into how much you can afford to borrow. When budgeting, it’s important to leave yourself some wiggle room for interest rate changes and other unexpected expenses. If you have trouble budgeting and understanding your savings and expenses, it’s worth getting in touch with your financial institution. Many banks, credit unions and other financial institutions offer financial advisory services free of charge. Get in touch with your financial institution to find out what services they can offer to you.
Are you one of the many Australians who spend in excess of $50 per week on coffee? Are there monthly expenses that you could reduce or remove altogether, such as gym memberships that aren’t being used, cable television plans which could be replaced by a cheaper streaming service, or similar? Once you’ve created your budget, it’s then time to sit down and look at all your regular and incidental expenses to discover where you could be saving money. If you often have trouble sticking to a budget and maintaining control over your expenses, there are also plenty of budgeting apps available for your smartphone which can make saving money easy and in some cases, automatic.
Finding more affordable housing options
Housing prices in inner city Sydney, Melbourne and Brisbane are at an all-time high, whilst property values around the country have risen by 31% over the last five years. When it comes to entering the property market as a first home buyer, buying your own home may mean having to seek out more affordable options. Thankfully, there are no lack of great, affordable housing options within master planned Villa World communities. Built with family and community in mind, Villa World’s addresses come equipped with all the important mod cons, and the turnkey homes mean that you’ll have no unexpected costs to factor into your budget.
Shop around for finance
In the last financial quarter, at least sixteen small-to-medium sized banks raised their interest rates, with the larger banks following suit. Research suggests that even a 0.1% rise in mortgage rates could see as many as one million households within Australia suffer mortgage stress.
There are, however, a handful of banks and financial institutions who’ve recently dropped their rates in an effort to compete with Australia’s ‘Big Four’ banks. Whether you’re looking for your first home, or you’ve already got a mortgage, shopping around for the best available rate can make the world of difference to housing affordability for your family.
A more radical idea being floated with the housing market is the concept of multi-generational housing. Decades ago, it was completely normal to have two, three or even four generations living under one roof. However, the trend has sadly gone out of fashion. Multi-generational housing offers older relatives the opportunity to remain at home for longer before going into residential care and can help to share the burden of cost between older generations and their children.
Help from the family/parents
Finally, another way to break into the housing market is to seek help from family, namely, parents. Banks and other lenders have a range of options available to parents who’d like to help their children own their own home. These options include co-signing on loans, lending or helping out with part of the initial deposit, or even making a guarantee against the family home. It’s important to speak to your financial advisor before entering into any financial agreement, to ensure that it’s suitable for all parties involved.
Every generation faces the issue of housing affordability, and it’s something that plays on the minds of many Australians. However, these simple steps and suggestions could make buying your first home that much more affordable. Speak to your financial advisor for more information on budgeting for your new home purchase, and get in touch with our team at Villa World today to find the affordable home of your dreams today.