We regularly hear about the housing affordability crisis in the news. It’s said that this trend will continue in Sydney and Melbourne for the next 40 years, due to demand pressures and limited supply. However, it’s not all doom and gloom – there are steps we can take to make the best of this challenging situation.
What is important to you
This will help you decide which way to go. A simple, yet challenging task would be to write a list of pros and cons and then think outside of the box for a solution. For example, write a list of pros and cons of continuing to live in a particular suburb or relocating to a nearby suburb, or relocating further away to have more space. Based on what you have decided, write a list of ‘must haves’ versus ‘nice to haves’ and determine what you can compromise on eg: living in a unit instead of a house. You might also consider different strategies to help you save eg: some young families have moved back in with their parents while trying to save a deposit. This may be an option for some but may not be workable for others.
Rent vs buy
Once you have decided where to live, you need to decide if renting or buying will work out better for you financially. To do this, you will have to add up all the buying costs (eg: stamp duty, solicitors fees, other fees and charges) and ongoing costs (eg: mortgage repayments and including possible interest rate increases, council, water, insurance, strata levies where applicable). Once you have this total figure, work out what your rent will be by researching the rent for similar properties in the suburb you want. You can do this on realestate.com.au under the rentals section. Then compare the costs of both options and this will help you decide to rent or buy.
Author: Deposit Power, October 12, 2017.
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