The Australian housing market has reached a point where first-home buyers can’t afford to buy and live in their ideal homes. And I’m not talking about anything extravagant.
They have to settle for much less even when there are 12 million empty bedrooms just sitting there empty.
How did we get here? Why is everything so unaffordable?
There are many factors. Here are some of the main contributors:
Property prices kept going up as a result of cheap loans that banks have been giving out for a while. The RBA’s low cash rate enables this. The APRA tightened lending and pushed experienced investors out of the market place
Armed with high borrowing power, new investors competed for properties and pushed prices up and up whilst experienced investors sat on the sidelines in dismay.
This is until authorities changed course and implemented even higher measures that prompted banks to tighten their approvals. But the damage has already been done.
- Empty Nesters
Here are some crazy stats.
62% of singles over the age of 70 live in a home with 3+ bedrooms, which adds up to 238,078 houses. At the same time, 82% of couples of around the same age have more than three bedrooms, for a total of 332,752 houses.
Just think about the number of young singles and couples that those rooms could house.
The situation is so serious that Western Australia recommended a cash grant for those who are willing to downsize. Not many of them have taken the government up on it, as you might expect.
Federal and state governments haven’t done a lot to reverse the years of heavy investor actions. In fact, some of them blame first-time home buyers.
A great example is former Member of Parliament and current Ambassador to the US Joe Hockey, who commented that first-time home buyers need to “get a good job that pays good money”.
Luckily, politicians are receiving a wake-up call, so they might start to focus more on solving the affordability crisis.
But until that happens, it’s up to the investors to take the road less travelled.
I can show you how to be a part of the solution rather than the problem. Click here for a FREE copy of my “National Report: High Yield Opportunities in Affordable Housing”.