Housing Affordability

Housing affordability has been a real hot issue in today’s global market. To sum up with the meaning, Housing affordability is the cost of a house (including its prices, mortgage payments, maintenance and everything) compared to an individual’s income over a year. Other terms such as “Median Multiple” or “House price to income ratio” are also used to define house affordability.

Over the past two decades, housing prices have spiked by approximately 150% in Australia. Today, the house price to income ratio is almost 7.7 times, which means, the average house price is 7.7 times more than the household income. 

With the rise in housing affordability, home buying is certainly a real task. But there are some ways you can minimize the costs for buying a home. For that you need to be careful on the following things:

• • Choose your location wisely: The major cities i.e Sydney and Melbourne have the highest house price to income ratio. Though the costs are really high, these cities are barely risky from the investment perspective. The overall suburb need to be analyzed well, to defend the high fluctuations
  • Long term investments: Buying a property as investment property can bring you a lot of benefits. Rental incomes can be a regular earning, and capital growth can heighten the price of the property.
  • Incentives: During the pandemic, there was a prediction that the housing market will fall up to 30%. But, the reality was something different. The major reasons are the incentives and proposals on buying a first home, that the buyers were impressed with. Thus, you can also take advantage of those.
  • Buying from the scratch: Also known as “Off plan buying”, under construction sites can bring you many advantages. You can get the benefit of lower initial costs, plus  customize the house  as per your preference. Though starting from the beginning is a hectic task, it can aid you in the long run. Various government incentives help you with minimal deposits. You can save money during the construction period.

Hence, the effect of rising housing affordability can be minimized to a certain level and a lot of money can be saved, if the right strategies are followed. We guide you through your finances, making sure that you incur the least cost that’s possible. 

If you have any further queries, we will be always happy to guide you through your journey.