How you can still get a slice of the Great Australian Dream

Over 70 per cent of Australians still consider property ownership to be the Great Australian Dream, according to new research from Commonwealth Bank of Australia.

This dream isn’t dead for young people, with 75 per cent of those under 40 still believing property ownership is the Great Australian Dream.

In fact, according to the statement by CommBank, 91 per cent of those surveyed believed this was “within reach for first home buyers”.

This is a stark difference to CommBank research from 2018, when property prices were first coming off the boil, and one in five Aussies thought property ownership was completely out of reach.

These attitudes do differ slightly when you compare them across each state:

• 74 per cent of Victorians and South Australians believe property ownership is the Great Australian Dream.
• Just over 70 per cent of New South Wales responders agreed – however the state also had the highest proportion of responders who believed the dream was unachievable (12 per cent). This is unsurprising when you consider that the highest property prices are in NSW.
• 64 per cent of Queensland and Western Australian residents believe property ownership is the Great Australian Dream.

What would-be buyers need to know

If you’re considering buying your first property you may be like one of these optimistic Australians, and for good reason.

Thanks to two Reserve Bank of Australia (RBA) cash rate cuts in a row, interest rates are now sitting at historic lows. Further, lenders (including some the big four banks) are easing lending rules for new borrowers as well as lowering their floor rates and interest rate buffers.

These moves have made taking out a home loan much more obtainable for would-be buyers.

RateCity has compiled a list of five first home buyer loans with low interest rates:

Source: RateCity.com.au. Note: Data accurate as at 22/07/2019. 

Please keep in mind that when choosing a home loan, there are a range factors that can impact your repayments. Make sure to check features, loan flexibility, the interest rate and other fees/charges when deciding which is the most competitive loan for you and your financial needs.

Tips for would-be buyers

1. Save a deposit of 20 per cent – this will help you show lenders you’re a reliable borrower who can manage their savings, as well as help you to avoid paying lenders mortgage insurance.
2. Factor in a buffer of 2-3 per cent – while it’s great that you can afford interest rates at their historic low point, you’ll want to make sure your budget could afford repayments on rates at least 3 per cent higher. If not, you might want to consider borrowing a smaller amount.
3. Downsize your Great Australian Dream – try and buy something smaller and within your budget for your first home. There’s a reason it’s called the property ladder – you’re meant to climb your way up to owning that mansion by the water you’ve been dreaming of.

Compare home loans in Australia