How To Stop The Great Aussie Dream From Being Your Nightmare

It’s a humble goal that many of us will set out to achieve in our lifetime, but as anyone trying to crack the housing market will tell you, there’s a lot more involved than you might have thought. Not the case for you? Well done, grab a latte and pat yourself on the back. But if you’re struggling like I am, read on friend…

My husband and I have been looking for around 12 months. Not hard-core weekend-in weekend-out trawling, but researching areas, looking at places, getting our finances in order and even throwing in an offer or two because YOLO. What I’ve learned so far is that the purchase price is never the actual purchase price; that you might need more for a deposit than you thought; and that a PhD in property could help you understand what the hell you’re doing.

I have to admit, it’s frustrating. We work hard, earn OK money, pay our taxes and saved what we thought was a decent deposit – and we’re not alone. According to McCrindle research, a generation ago the average house price was five times the national average annual full-time earnings. These days? Try 12. So it’s no wonder the percentage of Aussies owning their own home has dropped five per cent in NSW alone over the last decade. One in three Gen Y’ers are University educated, yet our cost of living is higher than ever and our wages simply don’t match.

According to Domain, by the end of 2016, Sydney’s median house price climbed more than 10 per cent to a record $1,123,991 – $300,000 more than the second-highest priced capital of Melbourne. So I’m in the wrong city. Craig Reichman and Jodi Gelbart are lending specialists from Alchemy Financial Solutions and dashed my suspicions that I’m a complete idiot and the only one struggling to bring that great Aussie dream to fruition.

“Buying a house isn’t easy,” says Gelbart. “You’ve saved all this money then you find out that it doesn’t go far and it’s even more difficult to do it alone. Don’t feel like everyone is buying houses and you’re the only one who can’t because you just don’t know what peoples’ individual situations are – they may have been saving harder or for longer or been gifted funds, for example.”

Ok, so there’s no one-size-fits all approach, but the mixed messages can be seriously overwhelming. To ‘get in’ or ‘sit tight’ – that is the question.

“Getting into the market early is critical because you can’t bank on capital growth,” explains Reichman. “Stick to your underlying values and goals for what you’re trying to achieve – your WHY, if you will. Getting into the market because ‘everyone else is’ (or you think everyone else is) isn’t a good enough reason. Think outside the box, there’s a whole mentality around getting into the market as an owner-occupier but that’s not the only way, getting an investment property is a viable strategy and people are building up healthy portfolios that way.”

So how do we work that WHY out when it comes to finding a dream abode (or hell, just something with four walls and a roof that we can pray increases in value one day)?

Gelbart says to answer that we need to ask ourselves a couple of questions. “You’re in a mortgage contract for 30 years, so think about your plans longer term,” she explains. “Where will you be in five or 10 years time? Write a pros and cons list – what’s non-negotiable to you and what are you happy to compromise on? You’re never going to find the ‘perfect’ property, no matter your budget.”

Buying a home seems to be a fiercely private pursuit. We rarely talk about it with friends and family and have trouble asking for help, even in the form of advice. Reichman says there are some common traps we should all steer clear of.

“Emotional attachment to a property and getting caught up in the ‘buzz’ of the market are errors we see all the time,” he says. “Assuming everyone around you is buying a place and feeling compelled to do so too is not the right reason to buy a home. This generation wants instant gratification, and that’s a dangerous game when you’re buying a house. The older generations tend to be more conservative because they’ve seen the impact of big crashes already.”

I’m glad I’m not the only one who’s on information overload. “People get bombarded by information online and do quick calculations but then are shocked when they get knocked back or find they’re not eligible for a certain rate they’ve seen advertised. Technology is really helpful but it can also be misleading so you’re better off relying on experts and people.”

Their advice?

“Revisit your budget and look out where you can scale back to save as much as you can,” Gelbart says. “We know the barrier of entry is high – you need a 20% deposit to avoid paying mortgage insurance so actively save and be fastidious about it. If you can stay at home for a little longer take advantage of that, it’s trendy to live in a nice place or to flatshare with mates, but make sure it’s in line with your strategy – there’s plenty of time to enjoy living on your own.”

Casey is an established health journalist, producer, TV presenter and wellbeing glutton/expert.