Are we looking at affordability the wrong way for first home buyers? Tas from our office recently pointed out that we need to stop focusing solely on housing and maybe start looking at other forms of accommodation. Here are his thoughts.
With another person making news headlines recently by supporting the theory that First Home Buyers are pricing themselves out of the market by wasting too much money on ‘smashed avo’ breakfasts, I thought I’d share my views on the recent state of the Gold Coast FHB market.
In 2016 the average first home buyer (FHB) loan in QLD was something like $305,500. For those FHB lucky enough to have a 20% deposit to meet standard financier requirements and avoid paying mortgage insurance, this would give you a budget of circa $382,000.
The three heat maps depict the volume and location of House, Townhouse and Unit sales recorded in the Gold Coast during 2016 for $382,000 or less.
Less than 3% of houses sold last year fell within the specified budget. Of those that did, they were predominantly a mix between old established dwellings in locations like Highland Park and Nerang, or conversely reasonably modern homes situated in potentially oversupplied suburbs like Coomera and Pimpama.
When consideration is given to Townhouses, the volumes increase significantly, as do the range of suburbs. More central, convenient and arguably more desirable places like Ashmore, Burleigh Waters and Varsity Lakes become an option.
If a first home buyer is prepared to consider Units as an option, the world is basically your oyster, particularly in suburbs along the coastline and in the heart of the action, where most of the youth long to be....
Point of the story and pictures is that a FHB who wants to remain nearest to the action or the coastline can basically forget about buying a house in the Gold Coast. But realistically, they can afford an apartment located in some of, if not all of, the best spots on the coast. Whilst key issues vary considerably from city to city and state to state, the issue on the Gold Coast is arguably not inherently related to supposed supply constraints that a lot of public figures may want you to believe. There clearly are an abundance of options available in varying locations. However, perhaps on the Gold Coast the term should be rephrased to 'First Apartment Buyer' instead of ‘First Homer Buyer’.
The deeper issue is arguably more closely linked to the likes of under employment and constrained full-time employment growth, with part time employment seemingly becoming the new black. Acquiring finance without at least one full time wage is incredibly difficult, if not impossible.