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Jessica Darnbrough
Home buyers around the globe are struggling to deal with the rising cost of housing and living, new reseach has revealed.
According to Genworth’s latest International Mortgage Trends Report, which surveys borrower sentiment of current and aspiring home buyers in Australia, Canada, India, Ireland, Italy, Mexico, the UK and the US, housing affordability is stopping first home buyers from getting onto the property ladder.
“In almost all of the countries surveyed, housing affordability is keeping FHBs out of the market, though the factors behind this lack of affordability differ, and range from rising costs of living and fears of interest rate rises, to lack of housing availability and rising house prices,” Genworth Australia chief executive Ellie Comerford has said.
In the US, Canada and Australia, debt is weighing down many who are trying to get a foot on the property ladder, with one in five potential FHB respondents spending more than half their income on debt repayments. In stark contrast, less than one in ten Mexican and Indian potential FHBs are suffering the same debt burdens. This is largely driven by cultural differences, with many potential FHB respondents in Mexico and India living with at least one other generation, allowing faster accumulation of savings.
These high debt levels of potential FHBs in some countries are exacerbating the affordability challenge, causing the average age of new home buyers to steadily increase in all countries except India. The average age of a FHB across all countries surveyed has increased from approximately 27 in the 1970s to approximately 30 in the 2000s.
“Australian FHBs are facing a worsening situation, with the average age of potential home buyers accessing the local market increasing at a faster rate than average,” Comerford said.
However, it’s not all bad news.
Ms Comerford told Real Estate Business' sister publication The Adviser that many of the surveyed respondents felt now was a good time to buy.
Moreover, many Australians still saw good opportunity to get onto the property ladder.
“FHBs may be struggling, but that doesn’t mean everyone is,” she said.
“Investors do still think it is a good time to buy. However, that positivity will vary depending on environment and location. There is no doubt that many Queenslanders and Western Australians think now is a very good time to buy. They know that both these areas will continue to go up in value, making them an ideal investment choice.”
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