Eight ways for young Aussies to get their foot onto the property ladder
It was something people used to take for granted: you save for deposit, you get yourself a mortgage, you find a modest little house and off you go: a property owner in Sydney, or Melbourne, or Launceston, or Townsville.
But how much does that picture line up with the reality these days? We’ve been looking at some recent media stories, and when you line them up you see many trends that suggest the dream could be slipping out of reach for many Australians.
- A third of all private renters were long-term in 2013, up from 25 per cent two decades ago, according to the Australian Housing and Urban Research Institute
- Data compiled by REST Industry Super estimates that by 2036 – one in four would retire without owning a home and would be forced to rely on other savings and investments. For a long time, many people have relied on their home for their retirement savings. If you’re renting and also not able to put anything aside in saving for retirement, your future could be looking meagre.
- Older Australians already have an 85 per cent rate of home ownership, but the number of first-home-buyer has halved in the past 10 years, according to Australian Bureau of Statistics data.
Sorry young Australia, it’s not looking so great, is it? There are large questions this raises that we’ll look at another day, but for now, we just want to offer a collection of suggestions that might improve your odds a bit. You’re leaning into a headwind, but this might just help slipstream you a little bit.
Have a spending plan
That’s a budget, but if you think of it as spending plan it doesn’t feel like a torture device.
Spend within your means
Try to live in a ‘less is more’ way.
Set financial goals
Set baby steps such as a date when you want to be debt free, for example, and work back from that.
Start saving now
We know you think you earn nothing. But try anyway- give yourself a ten percent imaginary pay cut and see if you can live that, and start putting away the ten percent.
Pay all your bills
Pay them before they’re due to save the stress and keep your credit record squeaky clean.
Remember the consequences of a HECS-HELP loan
Set yourself limits so that you don’t have to waste years of your life paying it back.
Know the difference between good debt and ‘dumb’ debt
Put simply, good debt is debt that gets you ahead financially. Bad debt is the debt owed on the partying element of your student days, and money spent on anything that goes down in value such as TVs, mag wheels, the latest iPhone, and so on. By all means buy these things. But pay for them from short term savings.
Rent less house
Can you share with others? Is there a cheaper option? Rent is dead money.
The sooner you can save and buy a modest flat or apartment the better. Where there’s a will there is a way.
Think big on the career front. Just like your money, set yourself a career plan. Find a mentor who can help you work through what a future in your industry looks like and have a strategy for how you’re going to get to the next step.
As a final word: you can do it. Choose the positive path and start by making one change at a time.