Doubts over affordability of the Australian dream
OWNING your own home is still the Australian dream according to new research by Westpac.
A new survey revealed nearly 9 in 10 home owners and first home buyers still believe owning your own home is the Australian dream.
86% of those surveyed also believe owning a property is a pathway to wealth. This is up five percentage points from 2015.
79% also believe owning a home is a reflection of one's success in life, up seven points from 2015.
Buying your own home is more about having family and friends who can help than it used to be, with people three times more likely to borrow money from family or friends than they were five or more years ago.
Chris Screen, Westpac Group Head of Home Ownership said "As the Australian property market becomes increasingly tough, first home buyers are looking for different ways to achieve their home ownership dream."Home loan affordability (32%) and difficulty in saving a deposit (29%) were identified as the most common challenges faced in the lead up to purchasing a first home. Respondents who have purchased a property said being unprepared for general home owning costs in the first two years after purchasing their first home was a key challenge (27%), and this was particularly so for current first home buyers1 (40%). "Affordability is a key concern for many Australians looking to get into the property market," said Mr Screen. "Some first home buyers do not consider the expenses they will incur after they've purchased their property. I recommend intending first home buyers create a budget to monitor their income minus their everyday expenses. This will be a good indicator of how much they'll be able to commit to repayments." Buying an investment property is more commonly considered among those who are purchasing a property within the next two years (69%) than current home owners (20%) - an increase of four percentage points since 2015. Among home owners who prioritise buying an investment property, 63 per cent say it is to invest in 'bricks and mortar'. Interestingly, 44 per cent of those whose first property purchase was an investment property did so because they believed it was the only way they could get into the property market. While the majority of home owners and intending first home buyers believe purchasing a home is the first step to a happy family life (68%), the report has uncovered 28 per cent would be willing to forgo the dream of owning their own home for perceived better financial returns through other forms of investment, such as stocks or managed funds. Despite a challenging market, the research has found Australians still feel positive about home ownership, and when asked what it means to them, listed stability (65%), financial security (64%) and a sense of achievement (56%). "There's a lot to consider when purchasing a home. To ensure you're making informed choices it's important to reach out to a home finance manager to discuss your specific situation, needs and options," said Mr Screen.