Saving to join Aussie dream
YOU’VE got to love the Australian Bureau of Statistics. They are the folks who keep track of wages, arts funding and – just when you thought it was safe – the cost of living that serves as the primary test for whether interest rates go up.
They also publish an annual overview of housing costs – a review that is unsettling, reassuring and interesting in equal measures.
For those of us with a home and a mortgage across Australia, housing costs are likely to chew up $408 every week, or enough to fuel that dream of one day living without a mortgage.
(The ABS says that will still cost you $35 every week once you pay the mortgage off.)
The news is somewhat more challenging for people wanting to get into the market.
Renters in private homes spend about $305 every week on housing costs, or enough to keep a roof over your head with the prospect of saving the additional $100 a week for the next nine years to afford a 10 per cent deposit on your new home.
Those bleak tidings hold little joy but little has changed since 1994.
Homeowners without a mortgage have been spending about 3 per cent of their gross income on housing costs since 1994-95 and mortgage costs have been sitting around 18 per cent of gross income over that period.
Similarly, rental costs have been hovering around 20 per cent of gross income, although they fell after 2002 and jumped in this last year.
So, what’s the problem? The amount we pay for housing has fluctuated but remains a relatively steady proportion of income, regardless of whether you own a home or rent.
The problem lies in our reliance on debt – or our inability to even get to that point.
Almost 42 per cent of people owned their own home without a mortgage in 1994-95 – but less than 33 per cent did in 2009-10.
That means there are more people with mortgages – increasing from 30 per cent to 36 per cent – and more people renting.
In fact, renter numbers have grown from more than one in five (18.4 per cent) to almost one-quarter (23.7 per cent).
And rather than think about ‘‘renters’’ or ‘‘tenants’’, think about people paying rent and trying to save money for a home deposit – all nine years to save a 10 per cent deposit at current prices.
All of this leads to a big thankyou to one of my earliest landlords, an architect with two investment units he rented to young couples.
When we were moving on, I pointed out that his rental rates were . . . um. . . low. He agreed but said he felt it was his duty to help young people starting out as best he could.
I’m now one of the 36 per cent but have to thank him for helping me out of the 24 per cent basket.