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Dont throw in the trowel…

May 16, 2010

The Sunday Times

Theres no need to become a permanent renter just because the big banks have refused you a housing loan there are plenty of other options that can still get you on the property ladder.
RISING interest rates, the end of the boosted First Home Owner Grant and higher land prices are making it more challenging for first time buyers to enter the housing market.
While some commentators say the home ownership dream is evaporating for many Gen Ys, housing industry sources urge people against resigning themselves to becoming permanent renters.
Builders say with innovative housing products, assistance from builders in house finance specialists and know how, those with the will to own their own home can do it.
Yet, according to research for the Bankwest Mortgage and Finance Association MFAA Home Finance index, Gen Yers across the nation are increasingly pessimistic about their prospects for home ownership. Bankwest retail chief executive Vittoria Shortt says one in three Gen Yers dont expect to own their own home.
Vittoria says the results represent the most pessimistic attitude seen in first homebuyers for the past five indexes.
She says more than half of Gen Yers surveyed are shelving plans to buy a home due to concerns about how much debt they will need to carry to afford a property.
“Seventy per cent of respondents were very concerned about the level of debt they will be committed to if they buy a property,” Vittoria says.
The MFAA national survey shows West Australians are more optimistic about their prospects for home ownership than Gen Yers on the east coast.
The survey shows more than 50 per cent of potential first time buyers in WA feel optimistic about their prospects which is significantly above the national average of 43 per cent.
Pursuing the dream of home ownership is a matter of will, flexibility and staying focused on long term goals, according to Switch Homes for Living sales and marketing manager Lee Morris, who says home builders such as Switch are devising affordable housing concepts to help Gen Yers into the market.

He says there are plenty of options for homebuyers who are willing to consider cheaper blocks in outer suburbs and housing designs with economical floor plans and exteriors.
Aussie Living brand manager Anthony Oldershaw says its really important for potential homebuyers to avoid being swept up by negativity about rising prices and interest rates.

Anthony says some people give up on long term goals of saving for a housing deposit and limit their future home borrowing capacity by getting loans for depreciating assets such as cars and plasma televisions.

He says those who are concerned about rising interest rates should consider that they signal a solid economy and this will underpin the strength of a property investment.

“If you buy a house you will generally end up owning it by the time you retire and along the way youll be future proofing yourself against rising rents,” Anthony says.
“You dont get to protect yourself from rising interest rates as a renter because the investor ultimately has to pass their costs on.

“Home ownership, which also gives you control over your future financial security, will always matter because of our primary need to have a secure shelter.”
Whatever you do, dont resign yourself to the rental trap just because the major banks have rejected your finance application, says Affordable Living sales and marketing manager Larry Scamaton, who encourages homebuyers to obtain a second opinion about their financing capacity from their builders inhouse finance specialists.

He says with median house prices for Perth now rising, its an ideal time to enter the housing market.
“The median price of a home in 1980 was $44,800, $195,700 in 2000 and $500,000 in 2010 and it is still rising. What will the median price be in 2020?” Larry asks.
DreamStart sales and marketing manager Ian Anthem says getting on to the property ladder as quickly as possible should be a priority for anyone wanting to build a foundation for their future wealth.
“While there are people who think house prices will fall, all the fundamentals, such as a strong economy and high population growth, point to higher prices,” Ian says.
Goodlife Homes sales and marketing manager Travis Mark says home ownership will continue to matter for future generations and those who receive sound advice from trained housing consultants will attain it.
“Increasingly, land developers are including a selection of 10 to 12m wide cottage lots with rear laneway access for cars,” Travis says.
“These lots can be up to $50,000 less than traditional 15 to 16m wide lots with street vehicular access.” Pindan project sales manager Nuno Carvalho says first homebuyers should shop around and possibly consider something outside their usual checklist, which might mean a different location. He says Pindan
developments such as Viveash Waters Edge Estate in the Swan Valley offers compact blocks with one or two level home options for differing budgets.
“Waters Edge also comes with the lifestyle benefits typical of an inner city apartment, with gym, large 25m pool, barbecue pavilions, children playground and a gated security community,” he says.

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