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The dire warning to those over 35 on home ownership

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IF YOU aren’t on the property ladder by 35 then you could be paying off your mortage with your superannuation, a property expert has warned.
The stark statement comes as figures show the wealth gap between generations is widening with home ownership among young Australians falling to the lowest level on record.

Startling Grattan Institute statistics show wealthy people aged 55-64 are the only group which has seen its home ownership rates increase over 30 years.

The biggest falls in ownership have been suffered by the young people aged 25-34, who saw their home ownership rate drop by more than 30 per cent from 1981 until 2011. Only 45 per cent of them own their own homes.

This is down 16 per cent from the 1980s, with almost half the decline coming in the past decade.

Only the richest Australians aged 55-64 have seen their home ownership levels increase. Picture: Grattan Institute.Source:Supplied

Only the richest Australians aged 55-64 have seen their home ownership levels increase. Picture: Grattan Institute.Source:Supplied

And, if the government doesn’t do something to help younger people own homes, there will be “stark differences” between the “haves and have-nots” in the near future, warns a leading housing policy expert.

The alarming findings come after Sydney held its title as the second-costliest housing market in the world, in this year’s Demographia International Housing Affordability Survey.

Research by Finder.com.au shows that even Sydney’s ‘bargain’ suburbs that were $500,000 or cheaper in 2012 have nearly doubled in value in the past five years.

While Melbourne, ranked the world’s most liveable city the past seven years by the Economist Intelligence Unit, is now the planet’s sixth-most expensive place to buy a house.

Brendan Coates, a housing policy expert at the Grattan Institute, said the issue of young people being locked out of the property ladder is one which will take at least two decades to fix.

“Reforming negative gearing and capital gains tax, which have added fuel to the fire, would be a good start but it would only lower prices by about two per cent.

“It’s not about how many homes we build this year or next year. We would need to see at least a decade of sustained home building to make a big difference.

“If Australians are not on the property ladder by the time they are 35, then it is unlikely that they will own their home outright,” he said.

“This means that more and more people will start to use their superannuation to pay off their debts. This is worrying because, over time, the differences between the haves and have-nots will be stark.”

He added soaring property prices are a major factor behind the rapidly growing wealth of older Australians.

‘More money going on servicing a mortgage means there is less to spend elsewhere, dragging on economic growth,’ says economist Paul Dales. Picture: Grattan Institute

‘More money going on servicing a mortgage means there is less to spend elsewhere, dragging on economic growth,’ says economist Paul Dales. Picture: Grattan Institute

“Households headed by 65-74-year-olds were on average $500,000 wealthier in 2015-16 than households in the same age group 12 years ago,” he added.

According to the ABS, house prices grew by 37 per cent on average across all the capital cities between 2003-04 and 2015-16 and by more than 50 per cent in Melbourne alone.

However, Paul Dales, chief Australian economist at Capital Economics said the age gap in home ownership is not all bad news for the Aussie economy.

“There are a lot of social issues which come out of young people not being able to afford their own homes, but for the economy – there’s not one clear answer to say whether it’s good or bad.

“One one hand, young people are spending so much of their income on mortgage repayments or on rent that they have far less money on other things.

“More money going on servicing a mortgage means there is less to spend elsewhere, dragging on economic growth.
“But, there are some offsets to this. The older homeowners have seen their family homes have soared in value and, as a result, they have more wealth to spend on other things.

“We also see a lot of young people living with their parents so they can save for a deposit for a home, and they are put off by renting because it is so expensive.

“This means their income is not being swallowed up by rent, so this can also have a positive effect on the economy.”

Some of the falls in home ownership are also partly the result of social changes Australians are waiting until later in
life before starting work, forming long-term partnerships, and having children, Mr Coates said.

“But most Australians still want to own a home, so it is reasonable to conclude that higher property prices are the biggest cause of lower ownership rates,” he said.

A Grattan spokesman said the only way young people can afford to buy a house is with help from “the bank of mum and dad”.

“Inheritances tend to transmit wealth to children who are already well-off, and home ownership is more likely among those who receive an inheritance, and more likely still among those who receive larger inheritances,” he said.

“Australia is becoming wealthier, but much of the increase is concentrated in the hands of older generations. The trend is unmistakeable: unless something changes, the young will fall further behind and inequality will get worse.”

Originally Published: brisbaneinvestor.com.au

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Opinion

Sydney Baby Boomers drive real estate boom in Brisbane

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Sydney Baby Boomers drive real estate boom in Brisbane

Brisbane’s bayside suburb of Wynnum is an attractive option for southern buyers.Source:Supplied

A MIGRATION of cashed-up Baby Boomers from Sydney will lead to a real estate boom in Brisbane, according to property investment experts.

A Property Investment Professionals of Australia (PIPA) members’ survey revealed that Brisbane was regarded as the best capital city for property investment.

Of the members who participated in the survey, 46.15 per cent rated Brisbane as the best capital for investment prospects in 2018.

PIPA chairman Peter Koulizos said the Queensland capital was expected to boom as a side effect of the Sydney property boom happening when Baby Boomers were looking at retiring.

“People that have a lot of equity in their home can retire or semi-retire by selling up and buying a home in southeast Queensland,” Mr Koulizos said.

And with the median house price in Sydney more than $1 million, he said this would give them a sizeable pile of cash left over after buying a home further north.

“That is because there is such a big price difference between Brisbane and Sydney,” he said.

A PIPA survey from last year also rated Brisbane as the best capital city in which to invest, but in the past 12 months the average house price has increased by just 2.9 per cent.

Mr Koulizos said a boom would come eventually, but picking the exact point was tricky.

“Property booms take a long time to gather momentum, I doubt you will see double digit growth in Brisbane this year but it may be different next year,” he said.

Melbourne was the next best investment option according to the survey, with 19.23 per cent believing it was a good place to invest, followed by Perth at 15.38 per cent.

Originally published: brisbaneinvestor.com.au

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Opinion

The property clock strikes big for hot spot areas

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The property clock strikes big for hot spot areas

9 Lion St, Ipswich. Picture: realestate.com.auSource:Supplied

DESPITE last month’s previous lacklustre values, analyst Michael Matusik has identified the areas on the upswing.

While property values remained fairly stagnant during February, property analyst Michael Matusik has revealed where the housing market is on the upswing.

Mr Matusik’s latest property clock for houses, has Brisbane, Gold Coast, Logan, Redlands, Sunshine Coast and Gympie all in upswing.

He said a market’s position on the property clock was based on the strength and direction of key indicators including sales numbers, price and rent, demand and how much new supply there was.

His latest Matusik Missive also listed Ipswich, the Fraser Coast and Noosa markets as heading into upswing territory.

Ipswich has many beautiful homes, often at prices well below what something similar would cost in Brisbane’s suburbs. A four-bedroom home at 9 Lion St,Ipswich is listed for $879,000.

The land the home sits on was bought in 1904 from the family of the then Ipswich Mayor Mr Pettigrew. A home was built on it in 1907.

The period home has 3.5m high ceilings, VJ walls, period window, and timber floorboards which have all been restored.

REAL ESTATE: 9 Lion St, Ipswich. Picture: realestate.com.au

REAL ESTATE: 9 Lion St, Ipswich. Picture: realestate.com.auSource:Supplied

The home has two new bathrooms, a large separate dining area and study. It is listed through Steve Athanates of NGU Real Estate Ipswich.

On the Gold Coast at Robina, 196 Easthill Drive is listed for more than $850,000.

The three-bedroom home is within the Glades Golf Community.

It has formal and informal living and dining areas, and an outdoor entertainment area with a swimming pool nearby.

196 Easthill Drive, Robina. Picture: realestate.com.au

196 Easthill Drive, Robina. Picture: realestate.com.auSource:Supplied

It is listed through Ian and Linda Mills of McGrath – Palm Beach.

On the Sunshine Coast at Noosaville a home at 15 Bluebell Court is listed for offers of more than $740,000.

The three-bedroom home is in a cul-de-sac in a residential pocket bordered by the Lake Doonella Reserve.

The single-level home has open plan living and dining areas. An outdoor area overlooks the pool and reserve at the rear of the property.

15 Bluebell Court, Noosaville. Picture: realestate.com.au

15 Bluebell Court, Noosaville. Picture: realestate.com.auSource:Supplied

The property has a double lockup garage, plus on-site side parking for a boat or caravan, on the 975sq m block.

It is listed through Tansy Grant and Justin Sykes of Ray White – Noosa.

Originally published: brisbaneinvestor.com.au

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Opinion

Where to invest: These are the suburbs where house prices are tipped to grow

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Where to invest These are the suburbs where house prices are tipped to grow

Annaliese Bullock, 27 with husband Jared, 27 and daughter Lyla 5 months sold their Burpengary before it even went on the market. Picture: AAP/ Megan Slade.Source:News Limited

THESE are the rising stars of Brisbane’s property market, the 27 growth suburbs investors need to know about.

INVESTORS chasing capital growth in Brisbane are spoiled for choice, with a new report identifying 27 suburbs where house prices are tipped to rise — and more than half of them have a median price of less than $500,000.

Property analyst Terry Ryder has identified the rising stars of the property market — where sales are rising steadily and house prices are set to follow. And they’re not the inner-city, blue chip suburbs you might expect.

Terry Ryder, managing director of Hotspotting.com.au.

Terry Ryder, managing director of Hotspotting.com.au.Source:News Corp Australia

Moreton Bay is the number one local government area in the state for growth, according to the latest Price Predictor Index report from Hotspotting.

The report examines sales activity, rather than prices, to determine the best and worst local government areas for property market growth.

This property at 8 Kroll St, Kippa-Ring, is inviting interest over $379,000.

This property at 8 Kroll St, Kippa-Ring, is inviting interest over $379,000.Source:Supplied

This big, four-bedroom home at 35 Westminster Rd, Bellmere, is available for offers over $379,000. Picture: realestate.com.au.

This big, four-bedroom home at 35 Westminster Rd, Bellmere, is available for offers over $379,000. Picture: realestate.com.au.Source:Supplied

The Moreton Bay region has 10 rising star suburbs where sales have been steadily increasing including Banksia Beach, Bellmere and Deception Bay.

This family home at 33 Male Rd, Caboolture, is on the market for offers over $349,000.

This family home at 33 Male Rd, Caboolture, is on the market for offers over $349,000.Source:Supplied

This cute Queenslander cottage at 62 Tibrogargan Drive, Narangba, is on the market for offers over $355,000.

This cute Queenslander cottage at 62 Tibrogargan Drive, Narangba, is on the market for offers over $355,000.Source:Supplied

Quarterly sales in Burpengary have risen from 69 to 97 in the past six quarters, while at Sandstone Point, sales are up from around 40 per quarter to 55 to 60.

Homes are selling so fast in the area that Jared and Annaliese Bullock just sold their four-bedroom house in Burpengary for $475,000 before they had a chance to even put it on the market.

Mrs Bullock said she contacted an agent at RE/MAX Ultimate, who brought through a couple of potential buyers and the offer was made within days.

But she’s not too surprised, given how close the suburb is to the train station, shops and the highway. The couple also recently bought two units as investment properties in nearby Caboolture. Acacia Ridge, Algester, Eight Mile Plains, Kuraby and Sunnybank Hills are also predicted growth areas.

This four-bedroom home on 617 sqm at 13 Stonewood St, Algester, is for sale.

This four-bedroom home on 617 sqm at 13 Stonewood St, Algester, is for sale.Source:Supplied

“It’s the affordable, outer areas that have got the most activity at the moment,” Mr Ryder said.

“The infrastructure is pretty good, with train links to the centre of the city, and there’s lots of shopping centres and good amenities.”

“The sweet spot is to be about 200 metres from a school, a shopping centre and a train station.”

SUBURBS WHERE SALES ARE RISING

Acacia Ridge $402,000

Algester $493,000

Banksia Beach $550,000

Bellmere $345,000

Birkdale $533,000

Boondall $490,000

Burpengary $420,000

Caboolture $340,000

Caboolture South $290,000

Deception Bay $345,000

Eight Mile Plains $788,000

Ferny Grove $595,000

Goodna $324,000

Jimboomba $480,000

Kippa Ring $415,000

Kuraby $679,000

Mt Warren Park $390

Narangba $458,000

Petrie $410,000

Raceview $318,000

Sandstone Point $420,000

Sinnamon Park $720,000

Springfield $426,000

Sunnybank Hills $660,000

Tingalpa $516,000

Victoria Point $522,000

Woodridge $299,000

Source: Hotspotting

Originally published: www.news.com.au

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