Growing Deposit for Property in Sydney – Biggest Issue for First Home Buyers
Australian interest rates are on low levels these days due to this Australians are paying comparatively less for interest payments from the past year. But is that enough for a first home buyer to invest in a property? Let’s see what experts says.
According to Australian Property Monitors, “The share of Sydney mortgages being taken out by first home buyers is wallowing around an historic low of 7 per cent”.
If we talk about the reasons behind this property hurdle, one of the reason is the steep rise in the property prices. Where the low interest rates have made easier for the Aussies to borrow bigger loans, the high property prices have made it harder to scrape together a down payment.
Domain Group economist, Andrew Wilson says, “This is a real frustration for potential first home buyers – often they could afford the repayments but they can’t get the deposit together”.
This prices growth is a biggest challenge for first home buyers as in this year the city’s median house price has been rising by about $2000 a week.
“That means that every week that goes by potential first home buyers get further behind,” says Wilson.
Sydney University housing expert Dr Judy Yates says, “A growing number of first home buyers in Sydney are getting assistance from parents to raise a deposit. Those without parents to help risk being excluded from the housing market”.
FHOG is largely counterproductive because they only help stoke demand and push up prices. The latest property price surge is likely to drive down the rate of home ownership in the city, especially in younger age cohorts. The last census, taken in 2011, showed the share of households owning their home outright has slumped by more than 13 percentage points since 1995-96.
News Source: http://www.smh.com.au/nsw/sydney-first-home-buyers-face-growing-deposit-hurdle-20150609-ghk6gf.html