Articles and Headlines from this week property news

HOUSING affordability has worsened during the past year, with first-home buyers needing to save 10 per cent more for a deposit, a report shows.

It was now taking 4.5 years to save for a 20 per cent house deposit, up from 3.7 years in the previous annual report.

Australian couples need to raise $85,800 deposit for a median-priced house, compared with $78,100 a year earlier, the Bankwest analysis showed.

The situation was worse in more expensive parts of Sydney, Melbourne and Perth, with first-time buyers needing to spend a decade saving up for a deposit to enter the property market in 26 local government areas.

Australia continues to be one of the most unaffordable places in the world to buy a house due to a chronic undersupply of housing, Bloomberg reports.

Booming market is a double-edged sword

Bankwest retail CEO Vittoria Shortt said the study exposed the booming market as a double-edged sword.

“While it’s clearly of enormous benefit to established home owners, it’s the complete opposite for many of their children. Many potential first home buyers are facing long periods in the rental market,” Ms Shortt said.

She said the problem had deepened since first home owners grants were now back at pre-financial crisis levels and house prices had risen.

“Our research shows a 25-year-old hoping to buy a home will be almost 30 when they actually achieve that goal,” she said. “It now takes longer to save for a house that it does to complete some university degrees.”

REIV chief executive Enzo Raimondo called on governments to increase first home buyer grants for existing homes and cut stamp duty for first home buyers.

MELBOURNE is leading an affordability-driven apartment surge as young buyers give up on the dream of owning traditional homes in most capital city inner suburbs.

As the Sydney apartment market cranked up after off-the-plan stamp duty concessions began this month, Melbourne buyers priced out of inner-city housing markets but not willing to live in outer suburbs were turning to small but affordable high-rise flats to stay close to CBD jobs and social networks.

With Australia’s $544,000 median house price $155,000 higher than for apartments and units, analysts believe it’s a trend likely to be repeated around Australia.

“If buyers are willing to sacrifice the dream of owning a block of land and house, they can greatly improve their purchasing options and will likely be able to own in much more desirable locations,” said RP data analyst Cameron Kusher.

Mr Kusher said the big advantage of apartments and units was that buyers could live in locations where houses were out of price reach.

Sam Nathan, an apartment specialist with property researchers and advisers Charter Keck Cramer, said Generation X and Generation Y saw apartments as their primary housing option.

“They have made a lifestyle decision not to live in traditional houses in outer suburbs,” Mr Nathan said.

“They want to be close to the CBD so as to not lose contact with social and business networks,” he added.

For Melburnians pushed out of the inner-city housing market, the latest figures for the second half of last year reveal a 25 per cent rise in apartment supply and small price falls.

Entry-level apartments are driving Melbourne owner-occupier sales, with the average inner-city 32sq m studio apartment selling for only $305,500.

One-bedroom 51sq m apartments average $379,500 (down from $385,000) and two-bedroom 73sq m apartments $530,000 (up from $529,000).

This compares with a Sydney CBD entry level range of $550,000-$650,000 for a one-bedroom, one-carpark apartment.

CAN’T afford to buy your own home? You might consider buying a house or apartment with your best friend, sister or brother.

Friends and family are joining forces to take advantage of the first home owners grant boost before it reduces in October and cuts out in December.

Have you ever bought property with friends or relatives?

One way to get a foot into the property market is to join deposits with a friend or relative. Co-buying can be a great strategy, says James Sheffield, general manager of mortgage wealth at Commonwealth Bank.

NB!! A contract is critical. Speak to your solicitor for advice on how to co-purchase.

There are many 25-35 year olds in urban areas who are “multiple investors” in property, either to live in or for investment purposes, he said.

“Co-owning shouldn’t be fraught with problems if you get advice at the beginning of the process,” he said.

Along with many other lenders, the Commonwealth Bank offers a Property Share Loan arrangement to help you co-own.Carolyn Miller, an advertising executive, said buying her first home with a girlfriend in 2004 was a great experience and started her on the road to financial independence.

But she did take time to set up an agreement. “I’d known my friend for about 10 years,” she said.

“It was a simple decision really. We were both living with our parents at the time. I figured it was going to take me another two years to save a deposit. So we took the plunge together and paid $430,000 for a three-bedroom property.

“We had contracts drawn up between us – that legal cost was an extra $5000 on top of our buying costs. But it is really important to have an agreement. “We both qualified for a FHOG and arranged a mortgage with Members Equity – the procedure was pretty standard.

“We had two individual loans but they were linked in that we couldn’t redraw without the other person as signatory.

“We both lived in the property for a few years, but I have since moved out and bought my own apartment, borrowing against my share of the house as collateral for my new loan,” Ms Miller says.

Co-buying tips – Agree upfront all the terms for entering into this arrangement together, and make sure you have proper documentation to support these decisions. – If you’re confused on how to look at it, treat it like a pre-nup to a marriage. – Envisage the worst case scenario – what would happen if your friendship break down? It probably won’t but you have to be prepared. – Go in equally if you can, one party holding the power is recipe for disaster!

How the FHOG and boost works with co-buyers : If two non-related people (that is not spouse or partner) who are buying their first home jointly to increase their borrowing power apply for the FHOG and and boost to buy the same property, only one of them will receive the funds, not both.

Co-investing in property gets you a foot into the market at today’s prices. With a foot in the market @ least you are ahead of the pack and building equity in your portfolio. Rather have 50% of something than 100% of nothing by forming a mutually beneficial partnership with someone else in the same position as you are now.

Umm …  not all gloom and doom as properT has a solution for you. Your Solution lies in :

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