 Housing dilemma
The Great Australian Dream of owning your own home is still alive and well according to Resi consumer advocate Lisa Montgomery.
Owning your own home is proving difficult for many, however low interest rates over the past year and boosts to the first home owner grant have helped housing affordability for some.
With interest rates on the rise, owning your own home could make consumers more cautious about how much they borrow and where they buy.
Co-ownership is on the rise, although still only a small segment overall within the home loan lending market. Managing Director of myrate.com.au says these types of loans are now 8-10 out of every hundred, whereas in the past it was around two or three in every hundred.
Lisa Montgomery agrees with the idea, suggesting acquiring a home loan jointly with a partner or friend could be the key to housing affordability for many Australians.
"Property is still the great Australian dream and for many people without a partner and a dual income it really is very hard to break into the market, but sharing a purchase is an option that we expect to continue," she commented.
Joint ownership does pose some legal issues, and all parties are strongly advised to get a Property Share Loan arrangement. However, in most cases, owning a property with a friend or family member works well and allows for a step onto the property ladder.
Ms Montgomery advises that all home owners should ensure that they have a two per cent buffer to allow for interest rate rises when they apply for a home loan.
Potential home owners should look at current interest rates as well as forecast rates, taking care to look at whether the rates cycle is going up or down.
Financial markets are tipping a rate increase of 50 basis points to official rates on Melbourne Bup Day when the Reserve Bank of Australia meets for it's monthly policy meeting.
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