Showing posts with label mortgage. Show all posts
Showing posts with label mortgage. Show all posts

Difficult for the Young to Buy a Home

Housing is just too expensive in Australia for the young.  To get a home at the lower end of the market one needs to stay away from auctions and be ready to go to the potential purchase as soon as it goes up for sale.
Young couple buying a home looking buy purchase
People panic at auctions.  They put a whole day into it usually bring the family in tow.  Once they have made the time and opportunity investment they really want the home and keep bidding against each other finally paying over the odds.

Already the young are making purchasing choices that are not what they originally planned.  Buying further out of town and going into flats instead of separate houses is not what they had intended.  However, they feel that they have to buy something, before or soon after marriage.

Only those with significant deposits are in the market now.  In 1981, more than 60 per cent of people under 35 "owned" a home.  Now it is under 50 per cent.  In the 1980s the young could buy their ideal home.  Today, they are buying something that they are not happy with: they are not content.  Moreover, they are borrowing double the amount of the 1980s.

It is not easy to go to parents and beg for help with a deposit when you left home two years before on bad terms - such is the culture today.  It is likely that young people buying homes now will enter retirement with many more years of mortgage repayments to go.
Society by Ty Buchanan
            Australian Blog   Adventure Australia
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High Rents Put Pressure on Low-Income Earners and the Poor

A fall in house prices is a good thing for first home buyers, but it puts a squeeze on the rental market. With lower property values investors invest in other things, the bank or the share market. You would think that rents would move up and down with the price of housing, believing that monthly rents are tied to monthly mortgage repayments. This is a generality that is not always true.

The reality is that as house prices fall, rents go up as investment to built more rental properties declines. In Canberra rents increased by 2.2 per cent last year. Perth continues to experience a drain of money to mining areas from Perth city itself. Consequently, new rental properties have not been built and rents have also increased.

Those on low incomes who do not earn enough to get a mortgage are at the mercy of the rental market. As rents rise they have to pay more. Furthermore, students from poor families cannot afford to pay high rents.

Despite the mining boom in Australia, many are doing it tough. Unemployment in the non-mining sectors is starting to rise. A high Aussie dollars makes it difficult for manufacturing to compete. The big question is: Should Government support non-mining industries?" Economic rationalist would say no. The market should determine who should survive and who should go under. Nonetheless, pensioners have rents subsidized. Should this support be taken away?
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