Rising costs may lead to Australians renting for longer

The-cost-of-living-could-drive-Sydney-residents-to-rent-for-longer-which-is-promising-for-investors_157_67159_0_14091465_300Rising living costs is the single “biggest financial concern” for Australians this year, according to an April 8 release from Mortgage Choice.

The finding comes on the back of the firm’s Money Survey, which found that rising utility bills were a big concern for residents around the country.

Over half (54.8 per cent) of respondents cited utility bills as their greatest concern. This was followed by 40 per cent stating job security was the biggest concern, while 30 per cent highlighted rising petrol prices as their most pressing issue for 2014.

Over 1,000 Australians were surveyed in order to deliver the report.

High living costs and pressure on housing supply in Sydney are factors that may drive up costs for those living in the New South Wales capital.

The Greater Sydney population reached 4.76 million people by mid-2013, according to an April release from the Australian Bureau of Statistics. Parklea – Kellyville Ridge had the fastest population growth between 2012 and 2013, with a 13 per cent increase.

When this is compared to the state population growth rate over the same period (1.4 per cent), it’s clear that there’s a squeeze on Sydney.

However, despite rising costs and a booming population, the news isn’t all gloom. Property investors in the area are placed in a good position, with demand strong for quality rental homes and apartments.

With many couples and families tackling utility bills and other costs, renting may be a more viable option than home ownership. Given the need for Lenders’ Mortgage Insurance for high loan-to-value ratio loans, some would-be buyers may choose to keep saving for a higher deposit, instead of jumping into a first time purchase.

In such cases, investors are primed to appeal to a wide pool of tenants and reap the rewards accordingly.

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