When people first move out of home, they will typically end up renting rather than buying their first property. While some young Aussies do choose to continue living at the parental nest and make their initial purchase an investment instead, the fact is that many of us won’t even consider taking out a home loan and making that first actual buy for many years.
However, there are definite downsides to getting stuck in the rental rut. You don’t earn equity, you have a lot less freedom and ultimately you lose a lot of that homely feeling. While some Australians don’t mind this (three in 10 renters actually actively choose to rent, according to McCrindle), others are looking at the huge value increases that Sydney has had lately and been thinking it’s time to get their own slice of that pie.
Taking on a home loan doesn’t have to be a stressful or scary event in your life, so long as you have people like the mortgage team at Customs Bank on your side. But just when is the right time to come and talk to us? When should you take out your first home loan?
The scarcity of accommodation
Finding a good place to rent can be difficult at the best of times. Discovering that perfect combination of a solid landlord, nearby amenities and a good price can seem like an impossible quest at times. And it appears that this has started to get even harder, as the Real Estate Institute of New South Wales reports that rental availability in Sydney has fallen across the board.
Meanwhile, this rental scarcity seems to be continuing to drive up rent prices too. Sydney is already the most expensive place to rent on average in Australia, and while rental prices have stagnated over the last year, CoreLogic RP Data still reports a 1.4 per cent increase. Values are going up, rents are going up, and all the while tenants are losing out on those capital gains.
Taking the first step
It might be a large commitment, but a home loan is a tool for building your finances, and the repayments aren’t much more than renting. CoreLogic tells us that the median rent in Sydney is now $2,400 a month, if you could pay the money off a house instead you would be building equity all the while.
But ultimately, making the choice to buy a property rather than rent is entirely up to you and your finances. Come and discover if you are ready by talking to the team here at Customs Bank. It might be the most important positive financial decision that you ever make.