Affordable Housing for First Home Buyers – a Unicorn? 40 years’ worth of savings for a Sydney deposit, UBS modelling shows – ABC News (Australian Broadcasting Corporation)

Affordable Housing for First Home Buyers

One day people will say, “first home buyer” and laugh. I’m not saying first home buyers will be extinct. Like unicorns, affordable housing for first home buyers will be very very rare.

affordable housing for first home buyers

Or will it be homes for first home buyers that will be rare?

The gap between house price growth and wages growth in Australia is killing off the first home buyer.

A lot can be achieved in 40 years.

You could build a decent sized Egyptian pyramid with manual labour, construct a massive channel connecting the Atlantic and Pacific oceans and still have another decade up your sleeve to develop the Apollo program to get the first man on the moon. First home buyers need 40 years’ worth of savings for a Sydney deposit, UBS modelling shows – ABC News (Australian Broadcasting Corporation)

affordable housing for first home buyers depends on wages growth

Can a first home buyer EVER get there?

“the time to save a 10 per cent deposit — with a 5 per cent saving rate on AWOTE of $80,000 per year — to buy a house at the average Australian capital city dwelling price of $820k has almost doubled…to 18 years now,” Mr Haslem said.

Mr Haslem noted the key driver of the time to save a deposit was house price growth relative to income.

In the last five years, house price growth averaged 7 per cent, far above household income averaging only 4 per cent growth.

“Our model suggests if these trends were repeated ahead — that is an ongoing increase in the house price-income and therefore the household debt-income ratio — a potential first home buyer would likely never be able to save a 10 per cent deposit to buy a home.” First home buyers need 40 years’ worth of savings for a Sydney deposit, UBS modelling shows – ABC News (Australian Broadcasting Corporation)

Scott Haslem - affordable housing for first home buyers

Scott Haslem Economist

Affordable housing for first home buyers is determined by wages growth

affordable housing for first homebuyers the wages gap

Even though wages are stagnant interest rates have fallen. Savings have been capitalised directly into the increasing price of property. That brings investors into the market further pushing up prices.

This is where “shared equity” comes in. Tony Puls Principal of Resishare has designed a system. Smaller investors and those trying to find affordable property for first home buyers are on the same side when buying a property.

First home buyers need less of a deposit, Investors gain an investment with a top quality partner looking after his/her investment.

If you’re an investor or first home buyer contact us for a confidential discussion on the system and how it can help you.

 

Know Someone We Could Help?

%d bloggers like this: