70% of Aussies pessimistic about their chances of getting on the property ladder

by Mike Wood20 Jan 2022

Australians are less confident than ever that they can get onto the property ladder, according to new research carried out by mortgage franchise giants Mortgage Choice.

The data, which was collated by CoreData in conjunction with Mortgage Choice’s new owners REA Group, found that 70% of survey respondents were pessimistic of their chances of getting onto the housing market, or of their chances of getting a home that they like and can afford.

The biggest stumbling block was seen as the price of housing, which has skyrocketed in the last year, with 30% rises in some areas.

That was followed by the inability of prospective buyers to find a place that they could afford in the place where they lived and worked.

The third biggest concern was saving for a deposit, with 56% of respondents concerned about their ability to save for a place as rising prices moved the goalposts further and further away.

Read more: Are planning problems set to derail price growth in NSW?

“Brokers talk to many first home buyers that have decided the only way to get on to the property ladder is to buy an investment property in an affordable area and then rent in the suburb or home they desire to live,” said Susan Mitchell, CEO of Mortgage Choice and Smartline.

“It’s no surprise in places like Sydney and Melbourne, where house price growth increased remarkably throughout 2021, that prospective homebuyers would be looking to invest in the outer-lying suburbs and rent and live closer to the city.

“Even though house price growth will probably slow in the first few months of 2022, I expect that overall prices will rise 5-10% over the year and this will see rentvesting remain as a major consideration for homebuyers.  

“This is where brokers deliver value by weighing up what’s really affordable. Rentvesting can be a successful long-term strategy to pay off a home loan or as an additional income source, but it can also become an expensive exercise if the investment property needs a lot of maintenance plus many other ongoing costs.

“The research also found that 70% of existing homeowners plan on staying in their current home for more than 10 years – so either way, property ownership is a long-term game.”