We all know about the housing crisis, which is even impacting regional cities like Dubbo, with home prices through the roof.
While the average Australian can’t do much about the drivers of this long-term problem that seems out of the control of even our elected officials to fix, there are some innovative ways that potential home-buyers can look to live with the current squeeze.
Although they all entail a degree of innovation, effort, and sacrifice that was not really required by young Australians of previous generations, they do offer some hope to families looking to enter a market that is more seller-friendly than at almost any time in recent memory.
Two incomes are better than one…pair up to purchase!
While more and more first home-buyers are buying properties with friends, colleagues, and even strangers, the key is getting some really-solid legal advice beforehand. Make sure you have a very detailed contract drawn-up, in case anything goes awry. Have a thorough understanding about if and when you plan to sell, what will happen in the event of job loss, or what you’re going to do if one of you wants to sell before the other is ready.
Getting Mum and Dad to go guarantor…
This old-style financial guarantee was popular in the post-war years during a previous housing crisis in which parents (or even grandparents, auntie’s uncles) go guarantor on their children’s loans or even an early inheritance. Sometimes this “help” comes in the form of a lump sum payment, or parents and family members can use the equity in their own home to provide security for a portion of your loan.
It’s a fantastic gesture, but it’s important that parents get good legal advice around exactly what they’re entering into, and to remember, if something goes wrong, the buck stops with Mum and Dad!
Consider some alternative options
Landlording – Get help paying your mortgage by renting out your extra room. Having a housemate also means splitting utility bills.
Buying off the plan or building – Purchasing off the plan means you only pay stamp duty on the value of the land, not the house and land, potentially saving you tens of thousands of dollars.
Buying a subdivided lot – Fewer square metres equals fewer zeros at the end of the purchase price.
Buying in the next village out – You may have your heart set on a new Dubbo estate, but once you’re in and settled, is being 20 minutes further-out, really going to matter more than having a bigger garden or an extra bedroom?
Save, Save, Save…
It’s the old “smashed avocado” argument, should you crimp your lifestyle in your best years, so as to be able to purchase home for your future? To get a loan, however, you need to be able to show you’re able to repay the loan, meaning you need a healthy savings history. So shop around for a high interest savings account, and start to make regular deposits.
Remember, it’s not just the deposit you’re saving for – you’ll also need money for stamp duty, legal fees, mortgage insurance, pest inspections, building inspections, moving and other fees.
Increase your income
Not so easy when living in the bush, where most of us are in careers where there are few opportunities to move on and up in the wage stakes easily.
But how about selling unwanted things at a garage sale or online, get a part-time waiting job at nights, or look to innovative income streams such as one-off business ventures, house-sitting, pet walking, or a weekend retail job.
Housing crisis have come and gone over the near-250 year history of modern Australia, don’t despair, you find a way forward to your dream home!
