By Kate Hill, Adviseable
We’ve all been renters at some stage of our lives – usually when we’re starting to live independently from our parents.
Share houses can be much fun indeed and are a rite of passage for all of us after all!
However, at some point, a certain percentage of the population will decide they’ve had enough of paying someone else’s mortgage and decide to purchase a property of their own instead.
Sometimes, they might even buy it with friends or family to help with the deposit and mortgage repayments, and then choose to live it in or use it as an investment property.
Regardless of which way the property cookie crumbles for them, the key is that they decided to get off the rental roundabout and start their own property ownership journeys.
First deposit difficulty
It’s always been difficult to save that first deposit, especially when you’re paying for rent at the same time, too.
That’s why lenders usually allow smaller deposits from first-time property buyers, because they recognise that their rent already eats up a significant proportion of their weekly incomes.
However, the longer that someone stays renting, the more difficult it can become to transfer into property ownership and this especially true for females.
There are a couple of reasons why some people stay renting, including the fact that it does provide you with more flexibility as well as the opportunity to potentially live somewhere you couldn’t afford to purchase.
But one of the main reasons why some women struggle to make the leap from renter to property owner is they are forever chasing their metaphorical tails because of increasing rents.
Never has this been more true that over the past year or so, which has seen rents rise sharply because of a number of factors.
According to the CoreLogic Quarterly Rental Review for September, a shortage of stock and high demand for houses, particularly in regional areas, has led to a dramatic increase in Australia’s rental prices.
In fact, the quarterly review found that national rental rates had increased by 8.9 per cent over the year ending September – the highest annual growth in dwelling rents since 2008.
Reducing first-time buyer activity
The strong property growth over the past year, as well as the sharp jump in rents, has made it more difficult for prospective property owners.
According to the Australian Bureau of Statistics, the number of owner occupier first home buyers fell by three per cent August and was down 2.1 per cent compared to the same time last year – the first annual decline in two years.
While first-time buyer activity remains higher than recent averages, that situation is not likely to last as the cost of purchasing, as well as their ability to save a deposit, moves further and further out of reach.
Ditto, with the uptick in weekly rents, which are unlikely to abate anytime soon, when the supply of rental properties has been constrained over the past few years because of low investor activity.
Now, all of these facts and figures are not supposed to make you feel gloomy, but rather to outline why it’s so important for people, and especially females, to make the transition from renter to property owner before they get stuck on the rental roundabout – potentially for life.
