HOUSING AFFORDABILITY

 Buyers are turning to the alternative purchasing strategies as Australia's housing affordability crisis deepens amid rising costs and limited supply of homes.

NAB'S market megatrends 2024 report revealed home ownership had fallen to 67% in 2021, down from 70% in 2006.

This report highlighted a significant disparity between housing supply and demand, with only 45,000 dwellings completed in the quarter two of 2024 despite the population growth of a 164,000 in quarter one. (why because of our damn government not building what they should have been relying on investors to supply the community with the rentals they need)

Over the past five years, home values have increased by 46.5% and rents rose by 39.9%, whilst wages growth lagged significantly at 15.3%. (if we talk about Perth well our rents have been way too low for some time, wages are very high, but the mere fact is that people need to move out further from the CPD as most other people have living in other cities).

The price gap between houses and units in the capital cities has reached extreme levels, with Sydney recording a difference of up to $612,900, according to the NAB.

Even with government grants and incentives, the gap between what people can afford and what's available continues to widen. Property prices keep climbing, the borrowing capacities are shrinking (not a bad thing). Many buyers are simply being priced out of the market. ((the mere fact is they have to buy further out or down grade their expectations and buy a townhouse or a villa not a house).

Interesting enough first-time buyers are increasingly turning to "rentvesting" as a solution, showing that 8,524 first home buyers took out investment loans rather than owner-occupier mortgages in the last 12 months to August 2024, representing a 24% increase year-on-year.

Regional areas have also emerged as an alternative for metropolitan buyers seeking affordability. (makes sense really rent where you want to live and buy in an area you can afford to buy)

Even the mortgage brokers are adapting their approach to start focusing more on the comprehensive financial planning rather than just securing house loans.

They are simply steering away from cashing the lowest interest rates to focusing on who offers the best overall solution for the client. This includes looking at the borrowing capacity, how the banks assess the serviceability, and which lenders have more flexible policies that suit more of the individual circumstances.

The borrowing capacity could vary significantly between lenders, citing a recent case where the difference was $40,000 for a first home buyer in Sydney.

Look the market is evolving rapidly and for many buyers, the process can feel a little bit overwhelming. The brokers are there to coach them through, to help them understand their financial position and fi nd some solutions that work for their specific situation. 

The long and the short of it all is buy where you can afford to buy rent it out and live where you want to live and rent it that property.

MAKE YOUR OWN DECISIONS AND GIVE IT A REAL GO!!!

SELLING MOSMAN PARK & THE WESTERN SUBURBS!!

KEEPING IT REAL IS OUR MOTTO!!