Guest post by Callum Scott of Scott Finance
Are you building for yourself? . . . or will it be a rental property?
Over the last part of the 20th century home ownership has been around 70% but has now slipped to 67.5%.
Why has this happened and will this trend continue?
Is it an affordability issue?
Mortgage Choice’s ‘Future First Home Buyer Survey’ found that nearly 32% of renters polled said that they would continue renting longer to save for a deposit.
A study by the Australian Housing and Urban Research Institute (AHURI) found that over the last 20 years the number of ‘Long Term Renters’ (more than 10 years) renters has increased from 27% to 33.4%.
ABS, Housing Occupancy and Costs 2011-12 shows that on average, tenants spend 20% of their gross income on housing. After income tax and living expenses, this does not leave a lot to put towards a housing deposit.
Although house building prices seem to be competitive will land prices continue to rise?
Unless salaries keep up, it all becomes tougher.
Perhaps with mortgage interest rates at a historic low and with lenders fiercely competitive in the deals they are currently offering. This may be the time to make a move to build a new investment property? . . . . . Just make sure you have done the calculations so you can deal with future rate rises!
For no cost advice about new house finance contact: Scott Finance