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Is the housing market really unaffordable?


Last week a news.com article announced that Australia is now the third least affordable housing market in the world with an average mortgage of half a million dollars!!! The article went on to explain that this means that Australians are paying almost 13 times their annual income to buy property.

Last year a young (by her own admission) local reporter said 'I’ve come to the realisation, at this stage of my life, I do not see myself ever owning a house' but that 'The ‘Great Australian Dream’, doesn’t have to mean the same thing to everyone'. I agree. The dream can be vastly different for everyone especially due to everyone's differing circumstances; some tougher than others (as outlined in the article also) but in an economy where interest rates are still lower than expected and housing seems unobtainable for significant parts of the population, it's time for thinking outside the norm.

Buying a house can have significant impact on retirement, providing a large asset to include in assets at that time but in a tightening market, there may be several steps in this process rather than just a simple 'buy a house and stay in the market' approach.

Getting into the property market doesn't always mean buying a house to live in. There are other alternatives, should that be in your plan.

1 - Buy an investment property while still living at home

2 - Buy a property to live in (or an investment property) with siblings or other people that are like minded

3 - Look for smaller houses or flats that are not in the most popular neighbourhoods - Lara and Bannockburn average house prices were under $400,000 in Jul 2017 (source)

4 - Rent out additional bedrooms to help fund your purchase

5 - In a recent blog post I talked about buying being cheaper than renting in some circumstances (here)

Think small to start with - a smaller unit one or two bedroom can be enough to get into the market - you might even be able to hold onto it and rest it out, if you upgrade later.

Of course with all property purchases, you need to ensure that you've covered all the loan bases and this is where we come in. You don't have to be ready to buy when you talk to us; just be thinking of getting a plan together.

Call the office anytime and set up and appointment.

Articles

http://www.news.com.au/finance/economy/australian-economy/australia-ranked-the-third-least-affordable-housing-market-in-the-world/news-story/00c7025859465f803bb0d29755310a45

Unfortunately a subscriber only article...

http://www.geelongadvertiser.com.au/news/opinion/jaimee-wilkens-a-youthful-view-of-the-great-australian-dream/news-story/31d9e5220b332528be6a728407162812

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