Are Australian Future Home Buyers at Risk?

Written by Stephen Logan

August 31, 2022

FinancialStress Continues Rising

Could financial problems be putting future home buyers at risk?

Financial problems and stress amongst Australians continue to rise alongside housing and petrol prices. The New Year, 2022 started on a negative note for households, as petrol prices continued to increase in conjunction with world events occurring in Ukraine and Russia. However, with Australia beginning to arise from 2 years of covid restrictions, the tides are turning.  

According to surveys conducted to determine the general household sentiment, many are still anxious. Canstar’s national sentiment checker survey indicates that 95% of Australians are financially stressed. In addition, it identified significant worries surrounding inflation impacting the cost of living as low saving rates and fears of unemployment.   

future home buyers at risk

 

 A reduced fuel tax

These worries are not all doom and gloom. The Government introducing a reduced fuel excise of 22.1 cents a litre, relieving transport cost pressures, is now starting to impact most major metropolitan areas.   

Unhealthy financial habits

On average, young Australians’ current financial habits need to be improved to achieve their first home buyer dream in the near future. Australians have some of the highest levels of household debt, ranking 4th according to a study, which coincides with a similar scale of underinsuring. Low-interest rates are also hurting Australians looking to save for their first deposit, with the reserve bank of Australia holding the cash rate at 0.10% since December 2020. As a result, making purchasing first homes by young Australians even more difficult.   

All this information can seem stressful and daunting, but with the proper guidance and financial corrections, this dream may not be so distant in the future. 

 

An Optimistic and Prosperous Future

Apart from this unsettling information, the Australian Bureau of Statistics also indicated signs of Australians becoming more financially responsible in the coming years. The savings rate of Australian households decreased to 13.6% in the final quarter of 2021 however remains above the national average.  

Financial habits vary depending on the population demographics. For example, single Aussies claimed to have been working towards saving more for the future, while larger families with children aimed towards paying off their debts sooner. In addition, the younger generations are keener towards investing in a wide range of investments, including real estate.  

home buyer

The Government is here to help

Despite many challenges, such as the increasing financial stresses and the rising cost of living, the market conditions offer some excellent prospects for those intending to become homeowners. The housing market is steadying as lower mortgage rates encourage home buying and many forms of assistance. These include Government grant schemes, becoming readily available with an extra $8.6 million being allocated to the budget, allowing a significantly more significant number of Aussies to become homeowners soon.  

 

Improving Homeowner’s Condition

The low rates themselves have improved the financial situation and quality of life for most homeowners, whether mortgaged or not. This is because they can use the lower rates to their advantage by locking their interest payments at a lowered rate, resulting in reduced fixed expenses and increased savings.  

 

A positive trajectory

Although the economic sphere is not at its peak, it does seem to be headed on a positive trajectory. Households are adopting better financial habits while slowly adjusting to this new world. As a result, many young Australians are placing homeownership as one of their most important priorities. Regardless of current challenges within the market and world events, adopting a firm budgeting and savings plan will propel prospective buyers closer to their first homeowner goal sooner than ever.  

How can Help My Wealth help you prepare?

At Help My Wealth, we know it is easy to say, “budget and save,” but it is also challenging when money is so tight.  

Current trends indicate that the most successful budgeting methods involve proactive systems that employ artificial intelligence. These systems ‘learn’ your spending habits, turning hours analysing figures into minutes.  

At Help My Wealth, we are all about helping people create realistic budgets and enabling our people to reach their savings goals quickly. So reach out and contact us today. We can show you the latest generation of the eSmart budgeting program and how they will work for you.  

Want to know more about this topic or how to get started? Then contact us here

Phone

0240141949

Email

info@helpmywealth.com.au

Address

Suites 1 & 2 Lake Macquarie Fair, 46 Wilsons Rd, Mount Hutton NSW 2290, Australia

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Contact

Phone

0240141949

Email

info@helpmywealth.com.au

Address

Suites 1 & 2 Lake Macquarie Fair, 46 Wilsons Rd, Mount Hutton NSW 2290, Australia

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