New research released today has found that half of renters say they cannot afford a home deposit, while over a third of renters have been renting for five-plus years, according to realestateVIEW.com.au.
The Housing Sentiment Report has found that for many renters, there are two major factors affecting the desire to purchase a home.
Speaking to Property Observer, general manager of realestateVIEW.com.au, Petra Sprekos, noted that it is her understanding that renters are stuck on the roundabout balancing two factors – affordability and lifestyle.
Noting that 28% of those surveyed noted that they cannot afford to buy where they want to live, with over 30% believing they cannot afford mortgage payments, it is interesting to note how these two act in concert.
"Renters do want to live close to work and to the shopping strips," explained Sprekos. These locations, including the more fashionable suburbs, have become increasingly expensive, making affordability a growing concern.
However, she notes that it isn't just the cost of property that's an issue. It's also the cost of other, now common, expenditures, such as holidays or even school fees.
"When you compare 20 years ago [to today], the biggest cost for a family or a couple or a single person was their home loan or rent, today there are also car loans, school fees, nice restaurants and holidays, as well. There's more that people do these days and that's when affordability comes in," she explained.
Overall, she noted, it's about perspective and the compromises renters are willing to make.
Anyone who remembers RP Data's "cheaper to buy than rent" reports will note that there are often areas where repayments are lower than rent, which is the concern of 32% of the renters surveyed. For those not willing to venture to these suburbs, then there are still options.
Sprekos suggests the following considerations:
- Consider purchasing an investment property in an area you can afford, while renting where you want to live.
- A joint venture (particularly for an investment) might be a consideration, where you team up with a trusted friend, partner or family member to buy together.
- Ask your parents to stand guarantor or to provide assistance in some way.
"It could be a little bit of fear of the unknown, or a fear that they can't spend anything else and have the same lifestyle. You do adapt," she said.
Of those looking to buy at present, 19% rely on their parents in some way, according to the survey's findings. This may be through borrowing money, living with them while they invest, or using them as a guarantor. Of first home buyers, 42% use one of these strategies.