HOUSING AFFORDABILITY
This term means two things:
1. The ability of buyers to afford, i.e. the percentage of salary they can afford to pay on a mortgage.
2. With all available resources where can they afford to buy?
No: 1
Is self-explanatory.
No: 2
Lots of buyers say they can’t “afford” a property because they are looking to live close to the CBD or in the area in which they grew up.
To get “into” the market buyers must compromise and broaden their horizons, put up with some inconvenience by living in another suburb they can afford.
For example, look further out. If buyers are looking to buy in say Glen Waverley, it is very difficult to find a good house under $500,000, yet another 10 minutes along the Monash at say the Hampton Park area there are 72 houses for sale as of 9th July priced between $150,000 and $250,000. All over the Melbourne metro area there are similar examples.
Buying in a non-preferred area will at least get your equity working and after a reasonably short time something in a preferred area may be “affordable” because your equity base is increasing. This assumes capital gain which in the short term, one to two years, may not be great because of a quiet period of low activity but history tells us that capital gain in real estate is a given over time.
