As some of you know I have been working my arse off, these past few years to regroup after years of chronic health and 7 years of misdiagnosis and NO MEDICATION. 3 years ago i was unable to toilet or shower myself without aid and help from family and friends, it was my lowest point and circumstances prompted me to seek additional medical advice. 3 years later i am correctly diagnosed, on substantial medication and as of next month will have met the criteria for specialist but $$$ medication. THANK YOU FOR YOUR TAX DOLLARS, they have and will keep me out of a permanent wheel chair. Sadly 7 years of misdiagnosis means substantial and irreversible damage has been done to my body, but i have returned to study and am eagerly working with my specialists to return to work on a low capacity.
Much of my eagerness is based around the 12 years i cared for my chronically and terminally ill mother. I saw first hand the effects of poverty and long term chronic health. Trust me when i say the only thing worse than living in poverty is dying in it. So i eagerly hope towards changing my future, but sadly I feel this is the cost of growing up in what i perceive as Australia most financially underprivileged generation.
Over the past 6 months or so I’ve been trying to educate myself and create a functional ten year budget that includes home ownership and this is the math I’ve come to.
Starting mid-2019, assuming I work 2 days per week at $35ph and still get some Centrelink I should expect to earn $1500pf in income.
The average Villa/Unit in Queenslands Burpengary/Caboolture/Deception bay areas is $235,000 its more or less the same in Regional Victorias Traralgon – greater region and even the Southern suburbs of Adelaide. Brisbane’s property market is holding steading and according to domin.com.au is expected to increase in price by up to 5%PA over the next 10 years, so I can expect the medium unit price to be $300,100 in 6 years’ time.
I will need at least a 20% deposit to not pay lenders mortgage insurance, more if they penalize me for a part pension income, which sadly is possible. A higher deposit potentially also helps negotiate a lower interest rate, although that too is highly likely to be impacted by perceived ‘socio-ecconomic’ status
With an income of $1500 PF I can expect to save $500pf towards a mortgage a $100pf saving will go towards every day expenses. $450 paid in subsidized rent! Thus it will take me 4.62 years to save a $60,100 deposit. Keeping in mind I have 1 year of study ahead of me as of today’s date to return to work and I will need a few months to move and settle in etc.. I can expect it to realistically take 6 years to save a mortgage deposit.
The current average low interest rate is 4.2%, but that interest rate maybe as high at 8% in 6 years. I will need to pay $8k in establishment fees, not including stamp duty; $16k with stamp duty included.
QLD & SA currently have a $20k First home owners grant and free stamp duty for FHO but that may not be around in 6 years.
Minus the $60,000 mortgage deposit, I can expect a
$240,000 Home Loan
@ 8% Interest rate
$10 Monthly mortgage fee
Repayments will be $859 PF
Keeping in mind incomes have stalled but CPI has not and this is likely to continue for many years to come, my maximum affordable repayments will be $900,00pf
Thus I do not see myself affording a home in the foreseeable future and considering stagnated wage growth and decreasing housing affordability, I suspect a recession will be Australia’s 20 year future.
On average you will live through two recessions and one depression in your life time, and given the current state of Australia economy, i fail to see how a single person from my generation can afford to buy a home without one. Sadder still for the folks caught out in one, who this is equally unfair to.
I’m discouraged because i fail to see what anyone let alone our government is doing about this, they can guarantee AAA rated banks and they offer a first home owners grant but heaven forbid they do something about the greater underprivileged who can not afford housing without help. How is it, no one has thought to offer a Lenders mortgage insurance guarantee or exemption for under privileged households who can show proven savings histories and good credit ratings. Or what about subsidized mortgage interest rates, either would be good option for folks like me, who comfortably handle a budget and just need a LEG UP and not a hand out. At the current rate folks everywhere like me who could handle a mortgage will be permanently priced out of the market with no hope of recovery. Let me tell you when it comes to chronic health and housing needs THERE IS NO DIGNITY IN RENTING! and it seems cruel to force folks like me further into the shadows while the middle class thrive. God help the folks who have zero hope of returning to any work capacity.