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Escalating prices and diminishing choices are driving many Aussies to rethink their location preferences for new homes, new research has found.
The latest survey from non-bank lender State Custodians Home Loans has found that more than half (54 per cent) of home buyers are prepared to settle for cheaper locations to get the home they want, even one not on their wish list.
Only 26 per cent said that they’re not prepared to sacrifice. The survey found that this group is prepared to take on a bigger mortgage to live in the home and location of their choice, even if it stretches their finances.
The survey also reveals that one in five people, either house hunters or existing owners, are prepared to rentvest to satisfy their lifestyle and location wishes while still growing an investment.
State Custodians general manager Joanna Pretty said that the location dilemma is a struggle many people face, particularly in larger cities.
“Often, people really have their heart set on a certain area but simply can’t afford a home there,” the GM said.
“For the most part, you usually have to compromise in some way when you’re buying a property. However, if you really love a particular area, already have friends and family there along with a number of conveniences such as work proximity, it can be especially wrenching if you have to look further afield due to unaffordability or needing more space for your family.”
The survey found that one-quarter of respondents would hold firm and buy in their area of choice, even if it would plunge them into financial stress.
But Ms Pretty advises caution.
“If you’re in that situation, you really need to thoroughly do the sums and seek advice before you commit,” she said.
“Sometimes, people struggle to see the big picture of how their finances might pan out over the years.”
The survey also found that people 18–34 years old who own or are buying their own home (32 per cent) are twice as likely to rentvest on account of lifestyle priorities than those 35 years and older (16 per cent). Overall, Aussies who are 50 years and older (60 per cent) are more prepared to live in a cheaper area than those aged 18–49 years old (49 per cent).
Ms Pretty said that rentvesting allows for alternative options.
“So many people rent nowadays, it’s entirely possible to create a beautiful family home in a rental property while still keeping an investment ticking over somewhere else.
“It just may require a little thinking outside of the box.”
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