Is it really possible that more than 3.6 million Australians will be locked out of the property market and could be stuck renting forever?
Well..a new survey of 2,006 Australians, commissioned by finder.com.au, reveals 47% of renters say they would consider renting for a lifetime as house prices keep rising.
While 57% of survey respondents had got a foothold in the property market and lived in their own home, the other 43% were renting.
Bessie Hassan, Money Expert at finder.com.au, says housing affordability levels were forcing some to rent their entire life.
“The margin between homeownership and renting is narrowing, and there may come a time when there are more renters than owner occupiers in this country.”
Ms Hassan says there is a growing number of Australians who will still be renting in retirement.
“More than 3.6 million Australians are resigned to the fact that they will rent forever – it is much more affordable for them when all the costs of owning a property are factored in.”
Ms Hassan says it makes sense to investigate buying while interest rates are so low.
“It’s difficult, but not impossible if ‘generation rent’ want to get onto the property ladder,” she says.
- More than half (55%) of male renters admit they would consider renting for life compared to only 40% of women.
- Following that trend, women renters (54%) were more likely to be saving for a deposit while renting – compared to just 37% of men.
- More male renters (8%) were renting but also own a property (‘rentvesting’), compared to only 6% of female renters.
- 4.2% of Queenslanders are ‘rentvesting’, followed by 3.4% of NSW residents and 2.4% of Victorians.
- Those from QLD are the most content to stay renting, with 24.6% of adults considering renting for life.
- NSW also has a high proportion of people who would rent forever, at 21.4%, while those in WA being the least content to stay renters at only 15.1% of adults.
- NSW residents have the highest proportion of adults currently renting but saving for a deposit on a home at 21.1%. Queensland is a close second at 20.9%
- South Australians were also the most likely to currently own a home with 69.4% owning and living in their home. Tasmanians were in second place with 63.9% home ownership, and Queensland in last place at 50.4% home ownership.
- A staggering 78% of baby boomers who are currently renting believe they will rent until the end, compared to Generation X (53%) and Generation Y (33%)
- Almost two out of three (61%) Generation Y renters were saving for a house deposit, compared to 38% of Generation X and 14% of Baby Boomers.
- Generation X respondents were most likely to own a property while renting (8%)
finder.com.au’s top tips for getting on the property ladder sooner:
- Consider a mortgage broker to help you find a home loan with the right features for your needs.
- Create a budget that you can realistically stick to so you can work out how much you can afford to borrow.
- Don’t go above your limit work out what your actual limit is and make sure it is conservative so that if you were to have a period without work you wouldn’t be under undue financial stress.
- The bigger the deposit, the better. Not only will it reduce the size of your loan but you will also pay less interest. A high interest savings account can help you save for a deposit.
- Lodge your application for the First Home Owner Grant at the same time you apply for your home loan to speed up the processing time.
- Pay off any excess debt so you can make saving for your deposit and paying off your home loan a priority.
- Make certain you research whether you are eligible to receive any government incentives or grants.