Look outside the square when tackling rental affordability

Record high median prices and increasing interest rates have made the “Great Aussie Dream” of owning a home a challenge for a lot of Australians, especially first home buyers. But there are now more financing options available than ever to help you break in to the market or grow your property portfolio. You just need to think a little outside the square.

The topic of housing affordability has been hotly debated in recent times, especially in the lead up to the recent federal election.

In Western Australia, the average mortgage has risen by $28,000 in the past 12 months. For most people this means finding an extra $5,500* per year to service this increase.

The factors leading to the this affordability challenge are well documented: the recent property boom and house price increase, a steady rise in interest rates since 2004 and lack of supply have all contributed to forcing some people out of the market.
But, according to RFS Finance Manager Simon Randall, there are gradual economic changes afoot that would indicate a swing back in favour of home buyers.

“Housing prices in Perth have steadied dramatically over the past year,” said Mr Randall.
“This normalization is good news for first home buyers.”

“Other positive economic factors are a strong labour market and low unemployment
– around one per cent in Perth
– and an increase of 6.3% in the average household’s disposable income.”

Mr Randall recommends seeking out the advice of an experienced finance manager before leaping into the market. “They have access to a wide range of lenders and will be able to talk you through the many home loan options available,” says Mr Randall.

“A lot of lenders are looking outside the square to tackle the affordability issue. This means offering less-traditional lending options such as increased loan terms – up to 40 years, no deposit home loans and equity finance mortgages.”

“Talking with a finance expert will help you negotiate through the many options and loan types and can help tailor something to suit your exact needs.”

Simon Randall is a Finance Manager
at RFS Finance – Realmark’s
approved supplier of customer
finance. www.rfsfinance.com.au
*Source: Reserve Bank of Australia,
Australian Bureau of Statistics, AFG
Mortgage Index