Do I Want to Buy?
It’s safe to say that most people think about owning their own home at least once in their life. But with properties seemingly becoming less and less affordable every day, do you even want to enter the real estate market?
Safe as Houses
It’s easy to look at lower house prices 10 or 20 years ago and say buying was easier then. But Australian interest rates are currently at record lows, and as University of Sydney Associate Professor Jamie Alcock reports, this means buying a property can actually work out cheaper long-term
than in the past.
The problem is more that interest rates might rise again, leaving those on variable rate loans (which can go up and down with the national interest) in the lurch when their payments increase. Of course, having a fixed rate loan means you aren’t affected by rate rises, but it also means you won’t benefit from a rate drop either.
What’s In It for Me?
At the end of the day, buying property can still give you your biggest asset, and something you can sell on later for more money. There’s no shame in being able to afford a home right now, but the security of owning your own house is still a big draw for a lot of Australians, and it’s a good idea to start even a small saving fund to plan for the future.
If this all seems a bit confusing, just remember buying a house isn’t just a one-time payment, but an ongoing cost that can go up and down. Rather than look at the immediate cost, it’s important to look at your financial plans, what home loans and rates you can afford, and what you can expect to pay over the length of your mortgage. You may find you can actually do better than you think.