The average median house price in Australia is now around $412,000 a whopping 108% increase over the 1997 – 2006 period with a corresponding 97% increase in the average home loan. It’s no wonder first home buyers are now contemplating a life time of renting.
The average first home buyer will now need to spend over 30% of their disposable income to service the minimum monthly repayments on a new home loan of around $2,332 a month. With rental prices for private housing rising sharply over the last couple of years the first home buyers capacity to save a deposit has been dramatically undermined and along with rising living costs the first home buyer is struggling.
The housing affordability crisis in Australia has come about because of a shortage of available housing and the excessive cost of raw land, long delays in planning approvals and the high cost of infrastructure to support community services. All of these factors are contributing to delays in residential construction.
A similar housing affordability crisis is occurring in the UK for first home buyers brought on by a prevalent housing shortage. The UK mortgage market has been pushing for longer fixed rate loan terms for periods up to 25 years as an immediate solution to ease the housing affordability crisis for first home buyers.
The impact on Australian First Home Buyers…
The emerging trend in Australia at the moment for first home buyers is a delay in home ownership with preference given to maintaining their lifestyle and being able to live in a suburb of their own choice rather than making sacrifices to purchase a home in a less desirable location. With rising debt, large deposit requirements and soaring house prices the first home buyer is opting to rent rather than face the uncertainty of being unable to meet the monthly loan repayments of a new mortgage.
Mortgage relief for the First Home Buyer…
Mortgage brokers like Altrust Finance, financial institutions and the Australian government are all working towards finding lending solutions to alleviate the current housing affordability crisis for first home buyers. Low doc loans and non conforming home loans are making it easier for families and individuals to own their own home. New shared equity schemes aimed at reducing the upfront costs of home ownership for the first home buyer as well as reducing loan repayments are emerging in the Australian mortgage market place. Non conforming loans, no deposit loans and family guarantee mortgages are all available to the first home buyer and are aimed at addressing the needs of the borrower. Australian mortgage brokers like Altrust Finance Group now have the flexibility to offer first home buyers a range of home loan options to beat the housing affordability crisis and purchase their first home.
Rob Donald has sinced written about articles on various topics from Home Buyers Guide, Debt Reduction Consolidation. Rob Donald is a Mortgage Broker with over seventeen years experience in helping people arrange their finances. Rob is the business owner of Altrust Finance Group, a mortgage manager and trainer in the financial field he is regarded as one of the most know. Rob Donald's top article generates over 1300 views. to your Favourites.