Many Buyers Are Giving Up On Their Dream Location
According to CoreLogic’s December Hedonic Home Value Index results, national dwelling values fell 0.3% in December, led by falls across Sydney, Darwin, Melbourne, and Perth.
Despite the nation’s softening housing markets, limited choices and escalating prices are forcing many Aussies to reconsider their options when it comes to choosing a new home and location.
Newly released research from non-bank lender State Custodians Home Loans reveals that more than half (54%) of Aussies who own or are looking to buy their own home say they’re prepared to live in more affordable or cheaper locations, even if it’s less than ideal.
In contrast, 26% of Aussies say they’re not prepared to sacrifice location or their ideal home, and are willing to take on bigger mortgages, even if it stretches their finances.
About one in five (20%) say they’d rather rentvest (i.e. purchase an investment property in an affordable location and rent in their ideal location) in order to satisfy their lifestyle and location wishes while still growing a property investment.
Joanna Pretty, general manager at State Custodians Home Loans, said the dilemma of location preference versus an affordable home is a growing struggle many Aussies face, particularly those living in big cities.
“Often people really have their heart set on a certain area but simply can’t afford a home there,” she said. “For the most part you usually have to compromise in some way when you’re buying a property. However, if you really love a particular area, already have friends and family there, along with a number of conveniences such as work proximity, it can be especially wrenching if you have to look further afield due to unaffordability or needing more space for your family.”
“If your dream location looks unaffordable, there may still be a possibility to live in an area through an alternative strategy such as rentvesting,” Pretty added. “So many people rent nowadays, it’s entirely possible to create a beautiful family home in a rental property whilst still keeping an investment ticking over somewhere else. It just may require a little thinking outside of the box.”
The study was conducted by Galaxy Research between 12 to 15 October, 2017, and was administered online amongst a nationally representative sample of 1,006 Aussies aged 18 years and older.
This article provides general information which is current as at the time of production. The information contained in this communication does not constitute advice and should not be relied upon as such as it does not take into account your personal circumstances or needs. Professional advice should be sought prior to any action being taken in reliance on any of the information.