Living the Dream? Students Find House Prices Unaffordable

The sharp rise in house prices in Sydney over the past 12 months (rising around 14.9% largely due to the growth in investment) has meant students see owning their own home as an unattainable goal – a dream far down a distant track. The ability to save up enough money for a deposit on an apartment or a first home is hampered by the fact that these students are competing with investors.

Consequently, students, domestic and foreign students, consider the only other option is to rent an apartment. However, the demand for rental properties again encourages investment, and also increases rental prices.

The significant rise in Sydney housing – be it owning a home or renting a home or apartment – has raised concerns regarding the debt to income ratio. It is hoped that with interest rates at one of their lowest, with low inflation, and an environment of saving that this concern may be placated for now, reported the Sydney Morning Herald.

Properties within inner-city suburbs, urban centres and suburbs on the outskirts of the city are in high demand, as Sydney tends to have a constant growing interest from foreign students wishing to live here. These students tend to want to live in inner-city apartments, close to universities, nightlife and friends. The demand has driven house prices, apartment prices, and rental accommodation well above the growth in other states around Australia. In particular, this demand on inner-city living has served to strengthen the area of investment.

The goal of saving enough money for a deposit on a first apartment can seem, these days, as an unattainable dream. This should not necessarily be the case given the low interest rates. However, property investment has caused a rise in property prices that students simply cannot afford. A first home may only now be affordable if the student chooses to live away from inner-city suburbs. Many students are forced to rethink how they “live their dream”, and consider “renting their dream” for now or perhaps pursuing their dream while living with their parents.