Sav­ing to join Aussie dream

The Advertiser - Real Estate - - Front Page -

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.

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