May 23, 2011
The cost of being a tenant is rising at a rate unseen for some time, making saving a home deposit a challenge for many and leading others to wonder if they will be better off as a property owner.
Capital city rents grew a solid 4.8% in the first quarter of this year alone, which is an obvious jump on the 2.9% increase experienced in the year to March 2011*.
A number of Australians are finding their way around price barriers by reducing rental costs via share housing and/or buying a home then living with friends, siblings or others as their tenants. 'Share housing' isn't simply a term for their rental situation, it's applied to life after buying.
Mortgage Choice's recent Future First Homebuyer Survey found this was the case for a significant proportion of its 1,013 respondents.
Company spokesperson Kristy Sheppard said, "8% of our recent 2011 Future First Homebuyer Survey respondents had already saved, or planned to save, on rent by moving to cheaper shared accommodation before buying and 14% will rent out one or more rooms after the purchase."
"With rents on an upward trajectory that we haven't seen for some time, affordable share housing is a clever way to save more of a deposit or to save it faster. It can also help make home loan repayments less of a burden after the purchase, though it may not be the ideal scenario.
"Our regular consumer surveys show us first time property buyers are getting older. I wouldn't be surprised if shared rental housing is an option increasingly utilised by older people as another way to make saving a home deposit easier. If so, this would be especially prevalent in areas of dense housing and high property prices and living costs.
"Inhabiting the same rental space with people outside your family or romantic relationship is often a financial necessity when utility, petrol and other costs increase as they have recently. The same goes for home owners who are looking to create more room in their budget.
"With the outlook suggesting Australia is set to experience continued rent and other living cost hikes as well as interest rate rises, people who are determined to be property owners may want to look at share housing as a longer term cost-saving strategy."
Call Mortgage Choice on 13 MORTGAGE.
For further information or to arrange an interview, please contact:
Mortgage Choice Corporate Affairs
(02) 8907 0472 or 0407 416 124