The Reserve Bank of Australia has found that an average home would have cost you about 2.5 times the average household income back in 1990.
Jump to 2021, and the disparity has increased by 100%. Housing across Australia costs five times the average household disposable income in 2021.
The cost of buying a home in capital cities is even higher. Sydney, one of the capital cities, ranks third on the list of cities with the least affordable housing.
Despite an improving job market following 2020’s lockdowns and COVID-19 related closures, house price growth is significantly outstripping wage growth. Experts think that by the start of 2022, house prices could rise ten times faster than wages.
Does it mean I won’t be able to buy a home in 2022?
You may not need to wait until 2022!
Property prices are expected to rise by 15 to 20% over the year, and saving a deposit to cover the increase could be a big challenge.
If you do not have the deposit to buy a home in a capital city in 2021, you can look for off-the-plan developments outside city hubs that could match your lifestyle.
With these off-the-plan developments, you can have a much larger property that fits your lifestyle with the same budget.
However, please be aware of the imminent increases in land taxes if you’re in Victoria. An increase in land prices is bound to follow with an increase in land taxes.
Another option for you to enter the property market in 2021 is by purchasing apartments. Apartments, compared to single dwellings, are much more affordable.
Even with a red hot property market, the median price for apartments has only increased by 1.62%, aggregated in five capital cities – Sydney, Melbourne, Brisbane, Adelaide and Perth.
Still undecided on the best way to own a home in 2021?
Please give us a call on 1300 889 743 or fill in our free assessment form today, and one of our specialist mortgage brokers will get in touch with you right away to discuss your situation in more detail.