More Australians would rather spend on experiences than save for a home

While 69.9% of Australians say that the traditional dream of owning a home on a quarter-acre block in the suburbs is still an important goal to reach for, 91.5% consider personal happiness as more important, according to The Real Home Reality survey recently released by Real Insurance.

Part of a series of national studies that investigates the shifting values and concerns impacting Australian families, the survey also revealed that 56.1% and 55.1% of Australians would consider purchasing an apartment or unit, or a tiny house respectively.

Residents in Victoria and New South Wales are the most likely to ditch the home ownership dream, with 58.1% preferring to spend on eating out and 49.4% on socialising. On the other hand, only 26.3% of those living in Western Australia said they were likely spend more on those activities.

The survey also revealed that, while 72.8% of Gen Ys find it difficult to purchase a home, 47.5% of Baby Boomers are undaunted by the process.

Health, freedom, flexibility
According to Real Insurance spokesperson Tania Bradley, although most respondents think that home ownership is still important, many cite “staying healthy, enjoying life and feeling financially secure as some of their greatest dreams in life.” Many Australians would actually choose freedom and flexibility in life over committing to save money for their own home.

Propertybuyer CEO and buyers agent Rich Harvey told MPA that the shift in the Australian dream was caused by the home price boom in Sydney, Melbourne, and in some larger regional centres, which created challenges for buyers looking to enter the market.

“Some would-be buyers have thrown up their hands and decided it’s all too hard, and pursued other interests,” Harvey said. “Some people have decided to change tracks and to not focus on home ownership, but instead rent and chase experiences.”

Some sacrifices required
According to Harvey, finance brokers can show their customers how it’s still quite possible to achieve home ownership and to build a property portfolio over time through careful planning, strategic buying, and by being financially prudent.

“Home ownership doesn’t mean eating baked beans for the next 10 years. Sure, there are some sacrifices, but there are also many ways to get ahead and to step onto the property ladder sooner than later,” Harvey said.

“Now is the ideal time to do this, while the market is soft and while interest rates are still low and projected to stay low for a considerable time.”

Harvey suggests that brokers should have the right software that shows a clear breakdown of borrowing costs, and the projected benefits of getting into the property market at long-term

holding. Brokers should also show clients “how to build in a buffer and find the most flexible lender for their buyers’ individual situation.”