For many, home ownership is a rite of passage — an inevitable step in our lives.
A property provides us with a sense of security, a stable asset and forced savings.
But while there are many benefits associated with owning a property, the reality is, property values are steadily climbing across the country, which is ultimately keeping a lot of potential home buyers off the property ladder and stuck in the rental market.
According to new research from RP Data, property values in Sydney climbed by 14.5% over the 2013 calendar year. And, if the latest Nine Rewards Consumer Housing Market Sentiment Survey is anything to go by, property values should climb further still in 2014.
As per the results of the survey, 56% of respondents expect property values to climb over the coming 12 months – up from 51% this time last year.
But, even if property prices don’t climb any higher this year (which is unlikely to be the case), values are still incredibly high.
RP Data shows the median dwelling price in Sydney is currently $655,250.
If we break that down further, the median price for a house is $775,000, while the median value for a unit in Sydney is $557,000.
If we look at houses for a second, a home buyer who is looking to avoid paying Lenders Mortgage Insurance would have to save a deposit of more than $155,000 (provided they don’t have a parent that is willing to go guarantor).
Saving a deposit of this size is simply unfeasible for many Australians, so it is no surprise to see a greater number of people living at home or renting for longer.
Of course, if you can afford to buy, now may be a really good time to do so.
Interest rates are currently hovering at historical lows and Australia’s lenders are competing aggressively for business via sharp interest rates and other borrower incentives.
Further, with property prices expected to climb further still over the coming 12 months, it may be a good time to step foot on the property ladder now before affordability becomes a critical issue.
If you would like more information on your home buying options, speak to us today.