The Great Australian Dream gets out of reach.
The great Australian dream is a belief that home ownership is an expression of success and security. Unfortunately, rising property prices are making it increasingly difficult for many Australians to achieve this dream, particularly those living in Sydney and Melbourne, the nation’s two largest cities.
At the end of the first quarter of 2015, CoreLogic RP Data found that the median property price in Sydney and Melbourne rose by 5.8% and 3.5% respectively over the quarter or 13.9% and 5.6% respectively year-on-year.
Despite prices going through the roof however, first home buyers (FHBs) have a desire to buy their first home sooner. Research conducted by CoreData in late 2014 found that close to one in five (19.0%) FHBs are intending to buy their first property within the next three to six months and 14.6% are intending to buy in the next three months, up from 14.4% and 12.8% respectively in 2013.
The desire among FHBs to buy sooner comes despite a decrease in the proportion who believe that now is a good time to buy property (65.2% vs. 75.0% in 2013). Furthermore, seven in 10 (70.1%) FHBs say that they would still be looking to buy a property even if interest rates were higher.
The fear of missing out is likely a major factor for FHBs being in the market. While property prices are beyond their control, FHBs need to focus on the things that they can control in order to be one step closer to attaining the great Australian dream.
For a start, FHBs should consider properties outside the popular suburbs, as prices are likely to be lower in these suburbs. Sacrificing their lifestyle, seeking family support or government grants and even living with their parents or family should also be seriously considered to top up their savings for a deposit.
Beyond these however, FHBs need to be as prepared as possible in order to be competitive with other potential buyers. Seeking advice from a trusted and reputable source, including a financial planner, as well as seeking the best home loan deal from a mortgage broker, will lead to more informed decisions and could shave thousands of dollars in unnecessary home loan repayments and other costs.
The great Australian dream is not as easy to attain as it used to be. With some sacrifices, preparation and persistence however, more Australians can soon tick this box in their life’s wish list.
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