Goodbye McMansions

More than one in 10 Australians downsized their home last year to lower their housing costs, according to a new report.

The Citibank research has also found 63 per cent of people don’t think home ownership will be an option for their children, while almost three-quarters think the Government needs to do more to help first-home buyers enter the market.

Housing expenses are one of our three biggest financial concerns at the moment, the Citi Fin-Q survey says.
However, Citibank head of mortgages Vibha Coburn says despite Australia’s housing affordability being among the worst in the world, people can still buy with good planning.

“You have to develop good savings habits early and have great discipline,” she says.

She recommends working backwards from a clear goal: “Don’t say ‘I will save $30,000 and see what I can afford’.”

Coburn says the Fin-Q finding that 11 per cent of Australians moved to lower their housing costs may also reflect our ageing population downsizing to free up retirement cash, and younger people taking a more conservative view instead of borrowing “up to the hilt”.

“People are saying: ‘I would rather be in a position where I can afford my mortgage rather than stress myself’,” she says.

The results found 62 per cent of Australians say home ownership is so costly that they have had to adjust their expectations.Mortgage Choice spokeswoman Belinda Williamson says when it comes to battling housing affordability, it pays to make regular contributions to a high-interest savings account.

“Set up auto-transfers from your salary account,” she says.

“Alternatively, open a First Home Saver Account, which attracts a lower tax rate of 15 per cent on interest earned and a government contribution.” Williamson says getting a family member to guarantee your loan or sharing the purchase costs with one or more people are other ways to crack the housing market.

Anthony Keane |

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