Home ownership and how to achieve it – today!
I was sitting in a café the other day and everything was normal. I had a cold beer in my hand, wedges on the way and a friend to chew the fat with. Suddenly, the usual gossip fat-eating turned into a conversation about home ownership and how it was the next thing my friend was planning for. To say I was surprised would be a monumental understatement. I was shocked, mostly because I didn’t think young people thought about owning their own homes anymore.
Last night, I was having a quick night cap with another friend. It was my round, so as the bartender poured, we were chatting about what time he started and various other inane topics of conversation. It turns out he works as a carpenter by day, and a bartender by night. Why work so much, I ask, being a person dedicated to three-day weekends and general laze. I should have guessed- he was saving for a house too.
Moving beyond the shocking fact that I am now old enough to seriously have these conversations, these recent experiences seem contrary to the perceptions of the wider world.
Mortgage stats
A recent survey by the Mortgage and Finance Association of Australia found that 50% of young people surveyed were shelving their plans to own their own home. As mentioned in the article on ABC Online, a third of people said they thought they would be locked out of the property market permanently and expected to be lifelong renters.
It’s a catch 22, says the association’s Phil Naylor. Because of insufficient housing, rental prices go up. Because rental prices are high, people can never afford the deposit on a home. So is there any good news if you happen to be under 30 and dream to one day have a place to call your own?
Lifestyle vs financial
An article on Yahoo! Finance suggests that home ownership should be viewed as a lifestyle investment first, and a financial investment second. While property is a good investment, it also has to be livable. If you hate sand, water and the smell of salt, don’t buy near the ocean. If you hate the idea of gardening or mowing the lawn, think about apartments, not a farm.
If you make decisions about home ownership with your lifestyle in mind, it’s probably going to work out better financially in the long run as well.
Know your limits
Budgets are crucial in the whole home ownership thing, not only to scrape together a deposit somehow, but also to know what you can afford when it comes to mortgage repayments. It’s suggested that your repayments (HECS debt, mortgage, credit card, bank loans) should not exceed 36% of your gross income per month.
Australia came through the GFC relatively well, but there are ghost towns throughout America, where owners have just walked out of the house because they couldn’t afford the mortgage. Ensure that you have budgeted for the repayments, and can afford them before you buy.
Scrape it together
Putting together a deposit is not easy, but the more down-payment you can scrape together, the healthier your mortgage will look. Take tough steps- curtail your social life, move back home and save, stop drinking- and save up a nice little chunk for your first foray into the property market.
Do you plan to own your own home?
What steps are you taking to achieve that?
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One Response for Home ownership and how to achieve it – today!
There are advantages and disadvantages to home ownership. Pride of ownership is nice true, but life if short. If you like working on your house great. If you like mowing the lawn and all that sort of stuff, great. If you like doing other things like skiing and mountain biking, I think you have a choice to make. I had a house and now I have an apartment. It’s a big change, but I don’t have to do all that maintenance work now. Hal
