Recent data suggests that the largest cost-of-living issue in Australia at present is related to housing expenses – indicating that it is essential for homeowners to be comfortable with their financial plan and monthly budget.
Housing costs account for an average of 18 per cent of overall household spending, according to data released by Australians For Affordable Housing.
The Australia’s Broken Housing System report also states that 720,000 low to middle-income put more than 30 per cent of their income into housing – a level referred to as ‘housing stress’ – while for more than 460,000 households this rate rises above 50 per cent.
Whether you have a fixed-term or variable rate home loan, being armed with a comprehensive knowledge of the conditions of the loan and options available to you is essential.
Mortgage refinancing is often possible and in uncertain global economic times it could be worth your consideration. In the end your decision is likely to be based on the combination of a number of factors such as the Reserve Bank of Australia’s potential or real interest rate adjustments, rising inflation levels and share market crises around the world.
More than 380,000 homeowners with a mortgage claim to have experienced significant financial hardship over the past year.
If you feel affected by mortgage stress – a situation encountered by 50 per cent of low income homeowners – you would do well to discuss the specifics of your situation with an experienced mortgage broker.
In other significant data stemming from the report, the amount households spent on housing between 2003-04 and 2009-10 grew by 55 per cent. This represents an increase greater than any other form of expenditure.
House prices have also risen by 147 per cent over the past ten years, compared to an increase of 57 per cent in incomes.
However, this does not necessarily indicate that home ownership is not a viable and potentially lucrative investment opportunity – the key is to make the right purchase, at the right time, with the right deal.
Staying in the rental market for longer out of reluctance to purchase your own property can have its own negative financial impacts in both the short and long-term.
Even after receiving rent assistance almost 460,000 Australian low income households find rent saps more than 30 per cent of their combined income, while over 740,000 renters report that in the last 12 months they have felt the effects of significant financial hardship.
Whatever situation you find yourself in, it is crucial to be aware of how you can use your liquid and physical assets to help your future.