The average Australian dreams of owning their own property one day. Homeownership is a cornerstone of the drive for a high-quality life. Unfortunately, this dream is becoming harder to realize as the price of property continues to climb. In many areas, the average Australian house sells for over $500,000. Unsurprisingly, many young people find it hard to purchase a property.
The good news is there are properties available at lower prices and it is even possible to build your own home. Anyone looking to buy should chat with a reputable real estate agent Campbelltown and be aware of what impacts home affordability. This will allow you to prepare yourself and your finances.
Lack Of Supply
One of the most important aspects of any market is supply and demand. The greater the supply and the lower the demand the lower prices will need to be to shift the product.
The inverse is also true, high demand and low supply will push prices up. That’s the current issue with the housing market, there simply aren’t enough properties available for those looking.
It means those selling can increase the price in order to attract the best buyer and make the most money from their sale.
Growing Debt Issues
As house prices increase Australians need to borrow more in order to secure the property they want. Unfortunately, this means taking on more debt and increasing the risk of financial woes.
While this may not prevent people from buying, it is important to consider the facts. House prices are rising faster than wages. That means the percentage of your wage needed to pay an increasingly large mortgage is also increasing. With all the other bills that need to be accounted for, including existing pre-house purchase debt, people simply can’t afford to buy.
In essence, the gap between the rich and the poor is getting wider.
Unfortunately, finding the funds for housing purchases is further hampered by rising bills. Energy bills have been rising for years and the Russian war is causing them to rise even further. The higher bills go the fewer funds people will have available for mortgage payments and the more difficult it will be to get on the housing ladder.
There are several reasons why supply has slowed in recent years. The first is that companies are more reluctant to build after having been burned by the financial crisis and the global pandemic.
But, an increase in planning restrictions is also making it more difficult to get permission, whether you’re a commercial builder creating apartment blocks or an individual undertaking a self-build.
The more complicated the process becomes and the harder it is to get planning permission, the fewer the number of properties that will be built. That makes supply even tighter and drives prices up further.
Must check – long distance movers bronx ny
It should also be noted that it’s not just the building industry being more cautious after the events of recent years. Lenders are also tightening their belts. As such, people are finding it more difficult to secure funds in order to purchase a property.