New research from non-bank lender State Custodians Home Loans, finds more than half (54 per cent) of Australians who own or are buying their own home say they’re prepared to live in a more affordable or cheaper location, even one not on their wish list, to obtain the house they need or want.
In contrast 26 per cent of Australians say they’re not prepared to sacrifice location or their ideal home. They prefer to live in the house and location of their choice and are prepared to take on a bigger mortgage, even if it stretches their finances.
The survey of 1,000 people nationwide also reveals that one in five people (20 per cent) who are house hunting or already own a home say they’d rather rentvest – ie have an investment property in an affordable location and rent where they want to live – in order to satisfy their lifestyle and location wishes whilst still growing an investment.
State Custodians general manager Joanna Pretty says the dilemma of location preference versus an affordable home is a growing 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,” she says. “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.”
Whilst one quarter of people surveyed say they’d stick to their ideals and buy in the area of their choice, even if it meant they couldn’t really afford afford it, 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 says.
“Sometimes people struggle to see the big picture of how their finances might pan out over the years, so it’s advisable to talk to a professional.”
Young people 18-34 years who own or are buying their own home (32 per cent) are twice as likely as those 35 years and older (16 per cent) to say lifestyle and location is more important to them and they’d rather buy an investment property in a cheaper location and rent in their preferred suburb. Older Australians 50 years and older (60 per cent) are more prepared to live in a cheaper area than those aged 18-49 years (49 per cent) overall.
“If your dream location looks unaffordable, there may still be a possibility to live in an area through an alternative strategy such as rentvesting,” Ms Pretty says. “So many people rent nowadays, it’s entirely possible to create a beautiful family home in a rental property whilst still keeping an investment ticking over somewhere else. It just may require a little thinking outside of the box.”
About the research The study was conducted by Galaxy Research between 12-15 October, 2017. The survey was administered online amongst a nationally representative sample of 1,006 Australians aged 18 years and older covering: NSW, ACT, VIC, TAS, QLD, SA and WA.
About State Custodians Home Loans State Custodians is a highly awarded online lender, recognised as Non-Bank Lender of the Year by Money magazine for five years in a row.