If you have been looking to buy in one of Australia’s capital cities, then it would come as little shock to you that Australian house prices have become amongst the most unaffordable in the world.
New research reported by Business Insider Australia has shown that when the median salary of the world’s major cities is compared to the median house price, Australia comes out as one of the least affordable nations.
As the table shows below, Sydney, Melbourne, Perth, Adelaide and Brisbane all make it into the top 20, beating out US cities such as the greater New York area, Miami and Boston.
For prospective first home buyers in Australia the housing affordability situation is looking quite dire. Without family support to save for a deposit or get into a first home, the Australian dream of owning a property is slipping out of reach for many.
On top of this, it doesn’t look as though the problem will be abating any time soon with the median sale price of properties continuing to climb despite the increased supply of new housing.
The question then remains of how young Australians seeking to buy a property can try and make this dream a reality.
Start off with an investment property
Edging into the property market by buying a cheaper investment property in a location that is more affordable may be a good way to break into the housing market. This will of course still require a deposit so is a strategy best suited to first home buyers who have some money saved.
Moving to a more affordable part of Australia may be a viable option for some young Australians depending on their profession. If you can secure a job in one of Australia’s rural hubs, then you will be able to find a home that is more affordable than what is on offer in the capital cities. However, for those planning on starting a family, or who already have children, who rely on grandparents and family members for childcare and support this may not be a viable option.
Wait it out
Finally, if you’re not in a rush to get into your own home then staying in the family home while you save for a deposit and wait to see the where the property market is heading may not be the worst idea. Making investments in areas other than property and making sure you are debt free during this period could be other ways of progressing your home ownership goal while still at home.