Is the Australian dream fading into apartments?
Many Sydneysiders are having to reconsider their dream of owing a house as they realise their home loan budget cannot afford much more than an apartment.
According to the Federal Statistics Bureau, apartments and townhouses accounted for 35 percent of new housing construction in the three months ended in September 30, compared with 29 percent five years earlier and 21 percent 20 years ago.
In the U.S. a budget of $420,000 could buy up to three houses in premium cities such as Chicago or Dallas but in Sydney this would find a blase apartment over six kilometers away from the city centre. For a house, on that budget, buyers would have to look at least 25km's west of Sydney's CBD, according to the Sydney Morning Herald. However, economists are saying it is the shortage of housing in Australia that has helped the country avoid a crash similar to that seen in the U.S.
It is also expected that as Australia's cities continue to grow, it is likely that apartments and town housing development will grow with it. "When you look at the future of residential living in Australia, apartments will become a big component of it," said John Kim, head of Australian property research at CLSA Asia-Pacific Markets.
Although overall house prices may be beyond the control of the individual buyer, Australians have the ability to significantly lower the costs of paying off a house by doing a home loan comparison to find the best home loan with the lowest interest rates, charges and fees.
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