The new Australian Dream includes investment property for many Perth residents.
Some of you may remember when the Great Australian Dream was a nice house on a large land block with a family, a BBQ and a car in the garage. However, the recent Housing Affordability Sentiment Index (HASI) tells us that the new Great Australian Dream is much more grandiose and that we are aiming for much more than previous generations once did.
Every year, realestate.com.au publishes a survey called the Housing Affordability Sentiment Index. As you may expect from the name, the Index is a great measuring stick for Australian attitudes towards buying homes. This year, the index shows a changing national attitude towards the Great Australian Dream.
The most important takeaway here is that Australians are now thinking about and acting on buying investment property, both in the Perth market and nationally. Not only do we increasingly want to buy investment property, but we also want to buy holiday homes.
What We Want: the Numbers
Of all the homeowners polled, 32% want to purchase an investment property, with most having a goal of doing it within the next five years. Roughly 50% of those who don’t own a home said they want to purchase one within the next five years. 23% of all those who don’t own investment property hoped to remedy their situation within the next five years.
Those who aren’t homeowners and said they plan to purchase a home aren’t letting it stop them from having goals. 39% said they plan to buy a new car and 62% said they plan to travel overseas. 77% of the homeowners in the poll also said they plan to travel overseas, while 68% of those who want to purchase a home but don’t have one yet also plan to travel overseas.
How will We Afford to Meet our Goals?
The next set of questions were about how to attain the capital to buy those investment properties and go on those vacations. 4% said they would buy the property first and then lease out a room if they had to for extra capital. 6% said they may sell some of their valuables. 12% said they had other assets they could liquify, while 13% said they would work a second job.
48% of those polled said they would be happy to increase their debt by 10% if it meant they could buy property. Only 25% said they would buy with a relative or friend. 65% said they would give up luxury items and 64% said they would continue to drive their current car instead of “trading up” if it meant they could buy property.
The Financial Demographics
So, what were the financial demographics here? 71% of those who responded own one or more residential properties. 12.5% were looking to purchase a home and another 3% were looking to build. In other words, 86.5% of those who responded to this survey either own or are looking to own in the near future. 60% responded that their savings are higher now than in 2012.
Generation Y, also called “millennials,” born from 1980 to the early 2000’s, were a microcosm of changing attitudes towards property ownership. Despite being younger and not having had as long to amass money, 53% already own a home while 23% already own investment properties.
What This Means to You
We see this as encouraging news. For all of the bad press about the “unaffordability” of property, a lot of people are making the sacrifices necessary to not only buy their own homes, but to purchase investment properties. In Perth, that can be quite an achievement, but an entire young generation of home buyers are finding a way to get it done.
Those who are a bit older and don’t have investment property yet would do well to heed the example of Generation Y.
Call 1300 472 427 to obtain your slice of the new Great Australian Dream before it passes you by.
