Home Ownership and Renters: Where are We Heading?

Written on the 30 November 2013 by Callum Scott

It would appear that here in Australia home ownership is declining!  Over several decades home ownership has been around 70% but has now slipped to 67.5%. 


Why has this happened and will this trend continue?  Is it an affordability issue?  A survey conducted by Mortgage Choice (Future First Home Buyer Survey) found that nearly 32% of renters polled said that they would continue renting longer to save for a deposit.


  ABS, Housing Occupancy and Costs 2011-12 shows that on average, private landlord tenants spend 20% of their gross income on housing.  After income tax and living expenses, this does not leave a lot to put towards a housing deposit.


In the interim longer-term, housing prices continue to rise.  If salaries do not keep up, then it all becomes tougher. 


The Australian Housing and Urban Research Institute (AHURI) has found that 33.4% of all private renters are long-term renters (renting continuously for 10 years upwards).  In 1994 this was 27%, illustrating a most definite trend in increasing long-term renting.


It is interesting and also disturbing to note the finding by AHURI that long-term renters have lower rates of satisfaction regarding their place within their local community when compared with all others, whether renting or home owning.


It would appear that there are sociological as well as financial benefits associated with home ownership.  It is therefore unfortunate on more than one count that getting a foot on the property ladder is increasingly challenging.


Given the above, it should be noted that on the upside, mortgage interest rates are at a historic low and lenders are fiercely competitive in the deals they are currently offering. 

This may be the time to make a move onto that ladder – it’s possible that rates may have another cut in the offing but in the medium term it looks like they will head upwards.

Get a mortgage broker to match you with the best possible deal that suits your requirements.
 


Author: Callum Scott
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