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Current homeowners wouldn't be able to buy their home today
Australian homeowners have enjoyed such a jaw-dropping rate of growth that 35 per cent of homeowners believe they wouldn’t be able to afford their current home if they were buying today.
That’s the major finding from comparison service, Mozo’s latest research.
Also read: What $1 million buys you around Australia
Released this week, the research revealed 20 per cent of homeowners think their properties have experienced $300,000-$700,000 value growth since they bought their homes. A further 20 per cent put their properties’ value growth at between $151,000 and $300,000.
Unsurprisingly, 95 per cent of survey respondents said they have no regrets about purchasing their property when they did.
However, record levels of housing debt are beginning to bite some mortgage holders.
Noting this, Mozo property expert, Steve Jovcevski explained that the 2001-2018 period has been a critical period for Australian property.
Also read: Aussie property hotspots where demand is set to ‘rocket’
“A whopping 40 per cent of Australians purchased their home between 2011-2018, while a further 28 per cent purchased property between 2001 – 2010,” he said.
“This period signifies an unforgettable time in Australian property history where prices rose at an alarming rate, auctions ran red hot and properties sold for prices that economists could have never predicted.”
These housing price increases came at the same time as record low interest rates, further fueling the “buying frenzy.”
“This has resulted in an Australian housing market that leaves some feeling lucky they got in while they did, but also a large portion of Australians feeling like they missed their opportunity and are now essentially locked out of the property market.”
Also read: The CBA thinks Sydney property values can fall 10%
In fact, the last three decades’ 600 per cent property price growth combined with stagnating wage increases means 35 per cent of homeowners believe they wouldn’t be able to buy their home today.
“While the housing market has certainly cooled in major metro areas such as Sydney and Melbourne, there’s no way that prices will be dropping back to the price ranges before the property boom,” Jovcevski said.
“With the introduction of stricter lending criteria, stagnant wage growth and largely unattainable house prices, the Australian property market is now essentially broken for many hopeful property owners looking to make their first purchase,” he continued.
“Many Australians who once dreamed of owning a home are now looking at alternative solutions to financially safeguard their future as they come to face the reality that owning a home may no longer be possible.”
