The Great Australian Dream is still alive and kicking.
A recent Westpac survey revealed that 87 per cent of people believe home ownership is the Australian ideal, offering a pathway to wealth, financial security and personal success.
While Sydney and Melbourne prices have jumped 12.4 and 15.9 per cent, respectively, Darwin and Perth have both seen values slip 2.1 per cent.
But 90 per cent of Australians feel that the dream is out of reach, according to Mortgage Choice figures, with affordability and difficulties saving a deposit the key issues.
Millennials are even more sceptical. A new CoreLogic report revealed 95 per cent of this demographic are concerned about their ability to afford a home, 50 per cent of which are very worried.
However, property investment doesn't have to be daunting. Here are some useful tips to help you take the first steps.
1. Consider 'rentvesting'
We have covered 'rentvesting' on our blog before, but this trend is taking the country by storm, so it's deserving of another mention.
Rentvesting is when people purchase an investment property in one area, while choosing to rent accommodation elsewhere for themselves. The practice is especially popular among young people, as they can buy properties in affordable areas but continue to live in locations that better fit their lifestyle, such as the inner city.
You may not be getting your dream home at first, but you'll be building equity in a property and benefiting from the flexibility that renting provides.
2. Be savvy with your location
Choosing the best location for your property investment will be key to making your next real estate purchase a success.
Real estate values across Australia's capital cities have climbed 10.5 per cent over the last year, according to the latest CoreLogic data. But this only tells half the story. While Sydney and Melbourne prices have jumped 12.4 and 15.9 per cent, respectively, Darwin and Perth have both seen values slip 2.1 per cent.
— CoreLogic Australia (@corelogicau) August 1, 2017
For the most affordable properties, you'll have to look further afield than the capitals. But you can still achieve sizeable returns if you are shrewd; research areas that have high growth potential and demand due to local infrastructure projects, regeneration schemes and a growing population.
3. Budget effectively
Australian real estate mogul Tim Gurner recently hit the headlines after he suggested that millennials should stop moaning about housing affordability and save for a deposit by cutting down on overpriced avocado and toast.
Millionaire tells millennials: if you want a house, stop buying avocado toast | Life and style | The Guardian https://t.co/S4b0Yj8Wkt
— raul mcgee (@raulmcgee) July 17, 2017
While we don't necessarily agree with his comments, effective budgeting is still an important part of getting on the property ladder.
According to ASIC's MoneySmart website, there are several good starting points for building a deposit faster:
- Set, plan, track and manage your savings goals;
- Cut down on luxury purchases;
- Put your money into a high-interest savings account; and
- Consider staying or moving back into the family home.
Millennials appear to have got the memo on the last point – CoreLogic revealed that 27 per cent of people in this age group currently live with their parents.
4. Seek property investment help from experts
Property investment doesn't have to be a scary prospect and you're never too young (or old) to buy your first home.
But before taking the plunge, why not discuss your options with experts who can help you weigh up your options and choose a strategy tailored to your unique circumstances?
If you think the Great Australian Dream is beyond your reach, contact PI Store today to see whether we can change your mind.