Housing affordability and how we could help Gen Y

I am not sure if you noticed but every time the market seems to reach it peak and probably ready for a downturn the media seems to talk about affordability. I have heard the discussion about our children not being able to afford homes and a generation of renters.

I also noticed that retirees have a huge battle in hand as to where they could go after they sell. While the first issue is a commercial truth the second is something that is encompassed by subjective and retirement financial needs.


 New gen purchasing a property.

The new generation in the age group of 25- 32 have got their first job after uni, trying to move out and find they cannot afford Sydney or Melbourne units .The deposit as well as the repayments are an issue. Sydney and Melbourne have the best job opportunities ,They have their friends and family which is there support structure and so they need to be in these  Metros and if possible near the bars and shops and where things are happening. The above are all assumptions and many will not fall in this category.

Options for New gen

the options are .

Granny flat: A granny flat, or secondary dwelling, is self-contained accommodation within, attached or separate to an individual home. A Council or accredited certifier can certify granny flats as complying development without the need for a development application

provided they meet the specific development standards in the State Environmental Planning Policy (Affordable Rental Housing) 2009.

To be allowed to build a granny flat as complying development it must be:

1.Established in conjunction with another dwelling (the principaldwelling),

On the same lot of

  1. land as the principal dwelling (and not an individual lot in a strata plan or community title scheme), and
  2. May be within, attached to, or separate from the principal dwelling.
  3.  Timing: May be approved within 20 days if all council conditions are met .

Costs : 80,000 to 130,000

Getting help from  mum and dad .

Giving cash as a gift for a deposit


Some mums and dads are good planners and do start a saving habit with their children for balloon expenses like weddings house deposits etc

A cash gift will be considered by banks of the prospective owners can service the loan

Using the family home or a property as a guarantee.

If  the parents have equity in their principal home or in one of their investment properties this could be used as a deposit. This again would be subject to the children being able to service the loan.

Buying in partnership with a financial 

As crazy as it may sound it is preferable to have a clear cut agreement if the parents are going on the title, there are liabilities that could affect the family home too. We have seen situations where parents are now paying for the entire installment while the children are unemployed

Buying an investment property for a  deposit

If you are planning ahead this could be a good option. Many a time youngsters wait to collect a deposit to buy their dream home only to realize that the prices have gone up and their deposit is not enough. One could consider

buying in places  where you could  afford today and believe prices may go up.

You buy a property for $350,000, putting down a 10 per cent deposit ($35,000) and borrowing the

  • remaining 90per cent ($315,000)
  • Over time, the property increases in value by $100,000.       You create a cash pool of $80,000, which can be used as a deposit to buy the property that you dreamed of.


Buying in partnership with a financial agreement.


As crazy as it may sound it is preferable to have a clear cut agreement if the parents are going on the title, there are liabilities that could affect the family home too. We have seen situations where parents are now paying for the entire installment while the children are unemployed. There are various option to protect one’s self and it would needed to be worked around with an experienced solicitor.


Looking Ahead



There are various options the government is considering for first home buyers. Some of them being that one could use their super for a deposit. Victoria has indicated that there will be no stamp duty for first home buyers for purchases under 600K I will keep my ears to the ground and will inform you if you’re keen to know.

The government has had NRAS as an investment vehicle for many years. Most people I speak to do not know that the government gives you 10K per year for 10 years if you buy an NRAS property.


About the Author


Anil has been involved in various facets of real estate over the last 15 years in Australia. His strengths have been to understand the motivations for people to change their principal dwelling and to successfully manage the

transition both on a commercial and emotional level. Gaining several accolades for his work over the years, he is well grounded and never forgets that buying and selling homes is a huge emotional decision.


Disclaimer; Any of the above information is not to be considered as advice and does not take your personal circumstances into consideration. All the information is general in nature and you are strongly advised to consult a licensed financial advisor for your own investments.

Relation between volume of sales and price rises in the present market

Data often leads us to market signals and the wise ones can read it on time to get ahead.

I took a snapshot for the last three years .While we do believe that if we reduce supply and demand remains the same the price would go up. However if  available stock reduces and capital growth reduces then demand has reduced. Well I have enclosed a table showing this over the last three years 2014/2015/2016. Have a look and you would probably have the same conclusion as I did.  Have a look at the first file which is a word document. I have extracted the info from the three other attachments’ which are suburb profiles from RP data.


The other interesting fact is that all three suburbs  differed in their rates of increase per year. As a snapshot. Cherrybrook, West Pennant hills and Castle hill moved 59.07,60.8 and 51.5% respectively. Against logic as cheaper properties generally have better growth. West pennant hills with the most expensive houses with no train station or having a famous high school like Cherrybrook tech actually grew by a whisper more than Cherrybrook over the three years.


So if people are looking for a stable market to make a move this table may be telling them something.


Cherrybrook West Pennant Hills Castle Hill
Volume of sales
2014 215 233 520
2015 214 186 410
2016 169 171 380
Capital growth
2014 19.9% 26.6% 18.8%
2015 31.1% 20.8% 24.2%
2016 1.2% 5.2% 2.7%

As you may see capital growth dropped even though volumes decreased. This could signify that the trend has changed.Please post your comments as this is a tiny market segment.


All the above data was sourced from RPData.None of the above information is financial advice . You ought to look at your own circumstances before you come to a decision.



Housing Affordability and First Home Buyers

insurance and protection concept - realtor woman gives a house

A lot has been said about house prices and affordability. People in Cherrybrook and West Pennant Hills have been silently rejoicing that their properties have risen by over 40% in the last few years. On the other hand they seem concerned that their children may never be able to afford to live in these suburbs. However there are options the children and their parents have in helping their children get their first home.

Read More

The roles of a Mortgage Broker and do we need one?

Most of us believe that we are good shoppers and would be able to get the best deal from banks. Others have this comfort with their existing bankers and would work with them even if they are more expensive. Looking back at buying behavior over the last ten years there is a tendency to

  • Look for the cheapest mortgage.
  • Look for convenience.
  • Have a concern about fees and charges.
  • Flexibility of the loan i.e. to be able to switch from one type of loan to another.

Read More

Appraisal and final selling price

With the fast moving prices in Sydney and Melbourne the buzzwords are more like -what is my house worth, what is the value of my home. Since the rise has been dramatic we find that these questions are answered by almost everyone. Every partygoer will tell you, that everyone, wether they be accountants or engineers become real estate appraisers at this time of the property cycle. It is a time of joy among homeowners and fear for the “wanna be home owners” as affordability seems to be the key question. The truth is that since there are sales, it is affordable what most people are worried about is, how will their children afford a home. Will they be stuck with their children all their lives? You really can’t have it both ways. For most homeowners it is personnel. It is where they have their memories, their fun times and their sad ones. This emotion feeds the irrational price in their head. There are so many parameters’ that influence the price of   one’s home. Some of them are discussed below. Someone rightly said that the homeowner puts the highest value to his home followed by the real estate agent and then the bank. So it boils down to whom you ask.

Read More

The Emotional Journey

The thought of selling ones family home of 20 years is a daunting thought. Most people I meet have some excellent memories of their children growing up in their home, the backyard chatter and the wonderful sunsets from the balcony.

The first part of this journey is to understand that while these are valid emotions and memories for the buyer of your property it is irrelevant. So clouding the selling process with emotion can work against you. Easier said than done you would say. I agree. What will help you through this journey is to focus your thoughts on “why am I selling”. It is easier to convince yourself if you are going to a better place, emotionally, financially or physically.

Read More

Renege after being successful at an Auction

Many a time we  have been asked what if one walked away from an auction after being the winning bidder. It is a suspicious question if it came from a vendor going to auction. We  decided to investigate the issue and found there have been precedents.
An interesting fact that most bidders don’t know is that the auctioneer could sign on behalf of the winning bidder and the vendor if he so wished to do so. This implies that if we had a winning bidder whose details are known in the process registration and if the buyer making the winning bid decides not to sign the contract and walk the auctioneer could sign on his behalf.

Read More