Why millennials need to start saving
There’s always been a gap between the generations when it comes to home ownership – older people and their families in Australia have traditionally had greater means to buy property than their younger counterparts. And if you believe the latest research, that gap is only growing larger today.
The generational gap is growing in Australia
It’s only getting tougher for younger buyers to keep up with the mortgage repayments required to buy a house. A new report from the Committee of Economic Development of Australia (CEDA), entitled “Housing Australia,” found that the share of homeowners aged between 25 and 34 has shrunk by over 20 per cent in the last three decades.
CEDA cited a number of factors for this trend, including negative gearing encouraging older buyers to purchase more investment properties and capital gains tax reform doing the same. Whatever the reason, younger people are finding it tough to compete in a crowded property marketplace.
Strong saving habits are a good start
For younger Australians looking to beat the odds and buy a home despite the recent trends, the first step is to save as much as possible for a deposit. The Australian Securities and Investments Commission warns that you can get into trouble with a high loan to value ratio (LVR) – if you’re taking out a loan for more than 80 per cent of the price tag of your house, you may encounter problems such as a higher interest rate and a need to purchase insurance.
Buying property is always tough, whether you can find a favourable interest rate or not. It always helps to find a mortgage broker who can represent your best interests and find you a deal.
Our loan specialist can guide you through the process
As you endeavour to buy your first home, you’re likely to face many difficulties along the way. You might overestimate what you can afford or underestimate the impact of variable interest rates; the potential pitfalls are just about endless.
Contact the team at Premium Portfolio Finance and we’ll help you evaluate your options and choose a financial option right for you.