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Big shift in sentiment and financial plans as cost of living rises
A majority of respondents to a nationwide survey believe that they won’t be able to achieve the financial goals of their predecessors, and have a grim view of their home ownership prospects.
Big shift in sentiment and financial plans as cost of living rises
A majority of respondents to a nationwide survey believe that they won’t be able to achieve the financial goals of their predecessors, and have a grim view of their home ownership prospects.
A new survey by the Housing Industry Association (HIA) found that only 49 per cent of Australians believe that it’s achievable to own their own home.
This is despite 92 per cent of those currently renting wanting to own their own home.
In addition, 75 per cent of Australians believe that purchasing a home now is more difficult than it was a decade ago. Fifty-nine per cent of Australians anticipate that it will get more difficult in the next decade.
A further 71 per cent are concerned that they will face serious hardship in retirement if they don’t own their own home by that stage.
Despite the dim outlook of the survey respondents, it’s clear that home ownership remains a core financial and sentimental goal of Australian investors.
“The Great Australian Dream of owning a home is still embedded in the psyche of Australians,” said HIA chief economist Tim Reardon.
A buyer’s market?
Affordability has improved for Australian home buyers in the last few months, particularly in capital cities like Melbourne and Sydney.
Values are expected to continue softening along the east coast (which you can read more about here) which further boosts buying conditions.
A critical consideration for buyers in the current market is getting finance approved, given that lending conditions are tighter in a post-royal commission environment.
According to recent research from Digital Finance Analytics (DFA), the home loan rejection rate is up by 32 percentage points year-on-year. A survey of 52,000 households found that approximately 40 per cent of home loan applications were rejected in December 2018, up from 8 per cent in December 2017.
There are steps all borrowers can take to improve their chances of having finance approved, which you can read more about
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