According to new data from RateCity, singles who earn average incomes will find homeownership virtually unattainable in six of the nation’s capital cities.
Adelaide and Hobart allow people with an average income to purchase median-priced properties without the assistance of their spouses. Meanwhile, if you want to buy a home in Sydney, you’ll need to earn a salary that’s greater than six figures.
If you have a high income or inherit a lot, homeownership is unlikely to become a reality.
Singles have many practical tips to make it easier for themselves to move up the property ladder.
If you can’t break into the property market by yourself, then consider partnering with siblings, relatives, or close friends. CBA data has shown that mortgage applications that involve two or more applicants increased by 64% to 67% in the period 2014-2016, according to CBA. However, single applications are declining in number.
By pooling your resources with your co-investors you can overcome all financial hurdles to homeownership.
Other young adults and singles are turning to the “bank of mum and dad” to finance their first homes. According to data from ANZ Banking Group, the number of parents guaranteeing their children’s home loans has increased fourfold (from 5% to 20%) in the past five years.
Savvy banks and credit unions, aware that parents often balk at the risks associated with signing on as guarantors on their children’s home loans, have developed products that limit the guarantors’ risks by splitting the loan amount over two loans.
Parents can help their children by giving them a large cash gift.
The purchase of a house is a major financial investment. There’s the deposit, stamp duty, mortgage repayments, and other expenses to worry about. As a single person, you don’t have the benefit of a partner’s second income to make these expenses more bearable.
If you aren’t earning enough from one job to meet these expenses, then you’ll need to consider getting a second job or securing another source of income.
If you can’t afford to buy your dream home outright, then consider rentvesting. Rent it out, then invest the rest of your funds elsewhere.
For example, let’s say you want to buy a three-bedroom home in an attractive suburb, but you can’t afford the sale price. Rentvesting allows you to rent the home and then buy a property in a lower-priced area.
Rent the property to pay your rent and then you can sell it for capital gain. This strategy will allow you to own your dream home, and build a portfolio of properties in the future.