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What are the hurdles in housing affordability?

By Andrew Bell

While we're blessed with a real estate landscape that doesn't resemble the skyscraper-high prices in Sydney at the moment, people can still find it difficult to locate and secure affordable real estate. There are many barriers between Australians and Surfers Paradise property, but they can be addressed! Let's take a look at some issues facing prospective buyers in the current market and how you can get around them in Surfers Paradise. 

A shortage of supply

It's on the lips of many housing industry voices these days: There don't seem to be enough homes to satiate buyer demand in many areas. In Victoria and New South Wales in particular, supply is not sufficient to meet demand, and these states are seeing prices go up significantly as more people compete to purchase real estate.

However, according to the Commonwealth Bank Home Buyers Index from January this year, Queensland is a buyers market. This means there is enough supply going around, and conditions are in favour of the purchaser. It suggests you could be much better placed to buy Main Beach real estate than attempting an investment in the central Sydney market! 

Getting roped up in red tape

For all the good bureaucracy is supposed to do us, it sure can be a frustrating ride, can't it? Endless paperwork and ongoing waiting times for approvals and the like can be a real stick in the mud when you want to buy real estate in Australia. This is never more apparent than in planning issues across the country.

In a press release from the Property Council of Australia, chief executive Ken Morrison welcomed changes to foreign investment rules that were to improve affordability, but highlighted the red tape issue. 

"The best way to tackle housing affordability is to deal with the supply blockages in Australia's planning systems," he stated. 

"That means retaining negative gearing, which boosts supply and keeps pressure of rents but also getting rid of some of the biggest barriers to home ownership, like stamp duty."

The removal of these could be a great step forward for anyone interested in real estate in Surfers Paradise, meaning you deal with less pesky fees and processes when you buy.   

Keeping your funds in line with payments

One of the most important parts of managing a home loan and buying real estate in Surfers Paradise is making sure you can keep up with repayments. This becomes particularly crucial as we look to the future, where interest rates could rise again.

However, it is made difficult by the current wage growth situation, which is not keeping up with value growth in Australian property. A report from IBISWorld from the end of last year indicates that this figure actually fell below inflation over 2013-2014, which isn't great news for affordability.

However, the night is always darkest before the dawn! The same report suggests that this cycle has bottomed out, and we could be set for steady wages growth over the coming years, reaching up to 4 or 5 per cent. This bodes well for your Surfers Paradise property plans. 

Are you ready? 

No matter where you are in life, real estate is always an investment worth considering. By purchasing as early as possible, you can make the most of capital gains down the line and have yourself a fantastic nest egg generating wealth for your later years. Knowing where the aforementioned hurdles are makes them much easier to jump, and we're happy to give you a leg-up over them.

At Ray White Surfers Paradise we have decades of experience matching people with their ideal properties. Give us a call to find out how we can help. 

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