Single people who live alone are the fastest growing group of all households in Australia, and property developers are catering to the demand. Numerous property developments are currently being marketed to the solo buyer in ‘single-rich’ suburbs such as Waterloo in NSW, which has a 70 per cent single occupier rate.
The Australian Bureau of Statistics predicts single home dwellers will reach 3.1 million or 30.2 per cent of all households by 2026. The shift and changes in home ownership could be attributed to our ageing population, baby boomer break-ups, Gen X and Gen Y marrying later and even the longer life expectancy of women. Around two-thirds of Sydney city women have also never had children. The numbers have risen to 45,000, up 10 per cent in the past five years.
In Sydney’s inner suburbs, 24 per cent of people are married. That’s half the rate of the greater city and the rest of the nation, where almost 50 per cent of people have tied the knot.
With mortgage statistics showing single women now make up around 50 per cent of buyers, what do you need to consider before making a solo purchase?
Repayments vs. lifestyle
The top concern for solo buyers should be their ability to make repayments. Ask yourself what percentage of your weekly wage can be comfortably sacrificed to enter the property market. Consider how much of your current wage is now spent on rent and how much more you can manage before it becomes a burden.
Additional solo risk
We may be facing all-time property price highs and a volatile economy, but the Australian dream is still one of bricks and mortar. However, getting into the property market on your own also means managing that debt on a single income. Relying completely on weekly paycheques for repayments could be tough if job security ever becomes an issue. Plan an exit strategy should your circumstances change or consider how you could continue to make repayments (rental income/board/temporary work) if your income suddenly stops or decreases.
Don’t settle on your current banking solution out of habit. Check interest rates and look for the best deal you can find. Also, consider how rate rises might affect you in the future. A 0.25 per cent interest rate hike will add a $60 sting to the average monthly Australian mortgage repayment.
If you are buying solo, chances are, your circumstances will change and your home may become an investment property. You will be in a better position if you bought in a high-growth area. The equity of the property could be valuable for securing a future family home.
Whatever your reason for going solo in the property market, asking questions and seeking advice could mean today’s informed decisions become tomorrow’s wise investments.
Check out this article from lifestyle.com.au about getting on the property investment ladder.