Just when you thought that the Australian housing market was slowing down and about to offer first time buyers a way in, the news is released that record numbers of investors are flooding back into the marketplace! This begs the question for more and more people, ‘how can I afford to buy property in Australia?’
The average house price has again risen, mortgage applications were up significantly in March, and investor finance in particular rose 8.9% in February alone and is now at its highest level since February 2003. So it’s clear that property in Australia is an excellent long term investment asset then - but how on earth can the average buyer find a way in? Well, there’s one cunning method that an increasing number of people are using to get their foot on the Australian housing ladder…
While you may have aspirations of owning a penthouse overlooking the harbour in Sydney or fronting the beach in Port Douglas for example, your budget and your ability to raise a mortgage may be holding you back somewhat from realising your dreams.
Believe it or not, understanding this and accepting that almost everyone is restricted when it comes to what they can buy and where they can buy it is the first step towards you getting on the housing ladder in Australia.
Yes, investors and baby boomers have been accused of forcing property prices in Australia ever higher - yes, high taxes and land prices are apparently to blame for making that perfect piece of real estate increasingly elusive…but who cares what the reason behind high property prices in Australia is? If you just accept the situation as it is and look at the dilemma facing you and millions more like you in a different way, you will soon realise that there is a solution available that will get you well and truly on the housing ladder, and well and truly on your way to one day owning that penthouse or beach house.
Take a cold hard look at your budget, go and see a reputable lender and discuss with them how much you can comfortably afford to borrow. Then, armed with a solid guide to how much you can afford to spend, begin looking at areas in Australia where the demand for rental accommodation is high and where you can buy property suitable to be let out for your particular budget.
So, you’re not looking at buying a penthouse in Sydney and you’re more likely to be looking at buying something like student housing in Adelaide for example – well so what? You’ll be on the housing ladder, you’ll be earning an income from your property and while you’re playing the property game, you can rent a property for yourself in a location that befits your lifestyle and meets your work/leisure requirements.
Still not convinced?
Well, did you know that vacancy levels for decent rental accommodation in Adelaide have actually fallen to 1%! That means the market is hotly in demand and it is also a far more affordable city than many other urban centres in Australia…you might not want to live there, it might not be your number one choice for a location in which to purchase property….but it represents a very real opportunity and it is certainly not the only location in Australia to do so.
Anyway, the point is not what you buy now, the point is that you buy something now – and that you buy it in a location that is in demand with tenants, where you can afford a property that will return you sufficient rent to significantly contribute towards your mortgage repayments and where you will be on the housing ladder and able to work your capital as the underlying value of your property rises.
And it needn’t be difficult. If you’re not living in Australia and you do not have access to Australian newspapers, get on the internet, find out what’s happening in the different towns and cities across Australia. Where you can pinpoint demand look closer at house prices, contact letting agencies and estate agencies, ask what a given property type will let for, find out about what types of property are in demand in a given location. You can do all of this online!
If an estate agent thinks they might make a sale from you they will help you. As you’re in the market for property in Australia, those who advise you best will make the sale they want and you will get on the housing ladder and everyone will be happy!
So, if you’re tearing your hair out asking yourself ‘how can I afford to buy property in Australia?’ – maybe you should instead be asking yourself, what can I afford to buy, will it return me sufficient rent to meet most of my outgoings and how quickly can I make my move because the sooner I’m in the real estate game the sooner I will potentially have the chance to start winning and moving towards my ultimate goal of owning my own home in Australia.
