The dream of home ownership in Australia is rooted deep in our psyche. According to the Australian Bureau of Statistics, approx 1 in 3 Aussies own their own home outright (no mortgage) whilst 37% own a home with a mortgage. One in four of us rents our dwelling. The numbers are similar for adults under 35, with the exception that very few (<5%) own their home without a mortgage (no surprise there). I’ve been renting since I was 21 when I joined the Air Force. A conservative estimate is that I’m probably 3-4 years away from having a decent home deposit. With some prudent saving, I might get there in 3 years.
In the past 9 years though, I’ve lived in 10 different homes (this includes 4 moves with the RAAF but even recently it’s been about one move per year). I absolutely can’t wait for a place of my own – living with others has been fun at times, and at other times a royal pain in the ass. I’m currently in the latter situation. Every now and then, as an escape from this posterior pain, I like to browse online rental sites for new listings. I was doing just this last week when I found a place with river views, close to work, public transport, with garage and air conditioning, I was so tempted I went to the open house for a look. On a whim, I applied for the place and to my surprise, was accepted.
Given that I’ve only just started working for myself (6 weeks in), have limited savings (< $10,000) and the yearly rent was $16,640AUD, I was shocked they approved my application. Needless to say, most WFT readers would agree this could stretch my budget, especially when I factor in fitting the place out with some basic furnishings. I called the agent and kindly declined the property but going through this process illuminated a few points for me:
i) the inner city apartment real estate market in my area is getting desperate,
ii) I can probably negotiate on price a bit when I look for my next a rental, and
iii) I should be able to purchase a similar place in the future for a reasonable price (I can’t see the apartment market rising significantly in australia, given current demand is relatively low and we have a huge surplus of apartments due to be constructed in the next few years).
For now then, I’ll continue renting and saving as best I can so that in the next 6 months I’ll have around $20,000 available to move into a new place, purchase a few essential items (fridge, couch, etc) and have a nice buffer should my income dip for a month or two. As much as I’d like to live solo now that I’m 30, I can’t quite afford it. Once I’m in a new place, I’ll continue saving like a squirrel caching nuts for the winter and hopefully be able to buy my own place by 2020.
How did you know you were financially ready to buy your first place? Or move from a shared accommodation and rent?