Friday, June 13, 2008

Property vs Budget

Property vs Budget We all want a house that we’re proud to call our home – and over the years the benchmark of this first home has well and truly been raised from where it once was.

In 1976 I paid a whopping $19,000 for my first ‘bachelor pad’…a basic three bedroom, conventional cream brick home on a pretty little street in the top corner of Tea Tree Gully. I’d gone through the rigorous process of securing a home loan from the Hibernian Building Society, having to prove my ability to manage this loan by showing a consistent savings pattern. Compared to then, it seems to be much easier to secure a loan these days!

The fact is, when you look to buy your first home it’s always going to be a stretch regardless of interest rates. Inflation hits all areas of life, so although house prices now are much higher than in 1976, the flip side is that wages have also increased at a relevant rate.

7 years ago Adelaide’s property market reached an all time high with a median price of $158,900 in the December 2001 quarter – During this years March quarter we reached a median price of $362,100. An annual increase of almost $30,000 over the past 7 years! Great news when you’re an owner, a bit more of a stretch when you’re a purchaser…not to mention a first home buyer!

Last week the South Australian Government acknowledged this growing pain for first home buyers when they handed down the 2008/2009 State Budget. Those struggling to buy their first property have been thrown some life support in the form of an additional $4,000 grant, on top of the existing $7,000 grant in place. This gives those who are trying to get their foot in the door of the property market a total of $11,000 in assistance. It’s good to see that our state’s youth are being heard.

So while the market remains tight, there is a little relief for all of you out their searching for your first home.  

Anthony Toop, Managing Director <>

© Toop Real Estate Group

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