Potential home buyers are feeling pessimistic about housing affordability as they struggle with rising living costs, a survey has found.
The Housing Affordability Sentiment Index commissioned by realestate.com.au has found Gen X and Baby Boomer buyers are the most pessimistic about housing affordability. The survey has also found 91% of respondents are now prepared to spend less on discretionary purchases as household costs rise.
While potential home buyers are prepared to sacrifice spending in order the enter the property market, the survey has indicated many amenities formerly seen as luxuries are now considered necessities by consumers. More than 75% of respondents said they would be unwilling to forgo private school education for their children or private health care in order to buy a home. More than 50% said they would be unwilling to live further than 10 kilometres from their ideal location.
While Gen X and Baby Boomer respondents were dour on the state of the property market, Gen Y respondents showed the most optimism. Social analyst David Chalke said the optimism of Gen Y respondents can be attributed to several factors.
"Firstly, Gen Y is imbued with youthful ambition, determination and optimism. As the best educated generation ever, they see no reason why they should not achieve their goal of home ownership, eventually. Secondly, they are the generation that stayed in the parental home longer than any other. Among other benefits, this affords them the opportunity to accumulate savings for a future home purchase. Lastly, contrary to the popular perceptions of Gen Ys as uncommitted and self-indulgent they are, in fact, remarkably focused on their future, are financially literate and well adapted to the vagaries of the 21st Century," Chalke said.
Gen Ys connect with investment potential
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