If you’re worried about rising housing costs, you’re not the only one. The property market has been rising for a while, and prices have recently reached an all-time high. Not only does this make buying a home more challenging, but it also drives rental prices up. How do you deal with increasing costs of housing in Australia?
What’s behind these skyrocketing numbers? You can thank a number of factors, including Australia’s population growth, migration to big cities, and supply constraints. In other words, there’s too much demand and not enough supply. Whether you’re trying to rent in a big city or the suburbs, odds are you’re facing daunting costs.
While changes are on the horizon, it will take a while for these to trickle down to everyday families. If you’re currently feeling the rental squeeze, here are tips for how to take the edge off so you can make the most of your budget.
As They Say: Location, Location, Location
First, there’s a reason real estate agents have the popular saying “location, location, location.” The average cost of your rental largely depends on where it is. With Sydney leading the way withthe highest rental costs in the country, it’s quickly followed by Melbourne and Brisbane.
While it’s not always possible to move elsewhere, especially if you’re tied to a specific place by your job or family, it’s worth considering. For instance, remote jobs are on the rise. Having a remote role could give you the freedom to move somewhere significantly more affordable. Weigh the pros and cons of living elsewhere within the confines of your own budget.
Negotiate a Longer Lease
Another thing to consider has to do with the terms of your lease. The most common rental term is for 12 months, an entire year. However, with housing costs skyrocketing, it might be time to take another look at the fine print.
If you’re worried about your landlord raising your rent, ask about a longer lease term. Landlords are in the business of stability. If you’re a responsible, trustworthy renter, odds are they want to keep you around. Asking for a longer lease term, like 28 or 24 months, means your landlord isn’t able to increase the rent during that time. It’s also a way to earn some much-needed peace of mind.
Get a Housemate
The more people you have split the rent, the cheaper it is for everyone. It’s true that having a housemate might not be glamorous, but it can be worth the significant savings. Whether this means moving in with a romantic partner, family member, or long-term friend, a housemate cuts your rent in half (or more).
When the burden isn’t fully on you to pay for your monthly rent, utilities, and so on, you’re no longer facing the increasing cost of housing alone. This is a huge weight off of your shoulders. Of course, always take a close look at your household budget before splitting costs with a roommate. Money troubles are the leading cause of strain in any relationship, so keep your household safe.
Shop During the Right Time of Year
Did you know there’s a “right” and “wrong” time to shop for a new place to live? It’s true, and it has to do with the weather. If you’re in the market for a rental during the warmer months, odds are you’ll face a lot of competition — and higher prices. This is because these are the most popular times to move. The nicer weather makes for an easier move, but you could save big with some patience.
Alternatively, renting in the middle of the year could afford you greater savings. Most people are scrambling to find a new place to live in December and January as the year changes. The middle of the year is a quieter time, and the costs will be more reasonable during this market downturn.
Consider Purchasing a Home
If you’ve decided renting is no longer for you, it might be time to consider purchasing a home. In most cities, it’s cheaper to pay a monthly mortgage than it is to afford monthly rent. While you’ll still need to factor in additional costs like home repairs, maintenance, property taxes, etc., you’ll also be building equity in a property.
Take a look at home loans in your area. With tax incentives and government first-time buyer programs, you might be surprised with how little you need to put down. Once you have a foot in the proverbial property door, owning a home can be a serious step in the right financial direction.
Find What Works For You
At the end of the day, there’s no single option that’s right for every family. Everyone’s feeling the rental squeeze with increased costs of housing. The best thing you can do is examine your own budget to determine if you need to make changes.
In the meantime, we’re here to help. Contact us using the form below to discover how to make the most of your budget this year. Don’t let housing costs get in the way of your long-term financial goals.