It would be a great shame if the current weakness in house prices does not see those groups previously frozen out of the housing market step up and buy a house to live in.
Whether it is in Sydney, Melbourne, Perth, Darwin, Canberra, Brisbane, Adelaide or regional Australia, housing affordability is improving rapidly with prices generally lower, mortgage interest rates remarkably low and competitive, and wages growth edging up in a steady if not spectacular way.
Sure, saving that deposit for a house is still hard and the banks and other financial institutions are making it a bit more difficult to get the loan you need to buy your house.
But for many reasons, getting into the housing market now or in the next 12 months to buy your house to live in will set you on course for a life of fulfilment and financial security.
I want to set the scene with a few definitions – when I say “houses” and “house prices”, I am referring to all dwellings – that is free standing houses, units, townhouses and apartments. It is a generic term.
And to make it clear, I am suggesting buying a house for you to live in, not to invest in, which is an entirely different kettle of fish.
Suffice to say, get that deposit saved, get your loan sorted and approved and get ready to take advantage of this rare opportunity to get on the property ladder.
No one can be sure how long the current lull in house prices will last, nor what will happen to your household income and indeed, interest rates set by the Reserve Bank of Australia and those charged by the banks and other financial services companies offering owner-occupier mortgages.
But 100 years and more of history suggests house prices tend to rise over a 10+ year time frame, as do incomes. These trends should overwhelm any issues with interest rates, if indeed any rate rises come to pass over the next few years.
Owning the house that you live in is one of the best things you can do for your long run financial security and mental well being.
Once you save the deposit, got the loan approved and have your offer for that house accepted, it’s yours! No longer will there be the pesky landlord failing to answer your calls about the leaky hot water service or kicking you out with a few week’s notice.
This peace of mind is worth a lot and are an addition to the financial benefit that accrue to homeowners.
Even if we were to have an unusual period with little or no house price growth, having your own house with a mortgage and paying it off is a forced saving that uses your hard earned money to build an asset, dare I say it, using money that would have otherwise been spent on smashed avocado on toast, café lattes or a personal trainer.
If you have been putting off buying a house, for whatever reasons, look now to get your financial affairs sorted out and get ready to buy – before prices find a floor and then start to rise.
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