Lowering the expectations of first homebuyers is something that has to happen in a climate where the cost of property is climbing, according to AHS Hospitality managing director Stephen Lauder.
Lowering the expectations of first homebuyers is something that has to happen in a climate where the cost of property is climbing, according to AHS Hospitality managing director Stephen Lauder.
Mr Lauder’s focus on getting people in their 20s and early 30s into the market, rather than worrying about buying a big four-by-two “McMansion”, comes after Perth’s house prices resumed their upward climb in the September quarter.
Real Estate Institute of Western Australia figures reveal Perth’s median house price climbed 2.4 per cent for the quarter to $460,000, or just below by the peak reached in March of $465,000.
“I am really worried about the people trying to get in to the market who are building the McMansion as their first home,” Mr Lauder said.
“To get in to the property market, get in and as much as you can, but let’s be realists,” he said. “Get in and get a three-by-one or an apartment or a townhouse.
“These people are coming and they are buying four by twos in the suburbs and then they are struggling to be able to afford it.
“People are going well and truly beyond their means and they are spending far too much of their income as a percentage on their mortgage.
“The first thing that has to happen is that people have to lower their expectations.
“You don’t need the flat screen [TV]. When I moved in we didn’t have curtains, we didn’t have carpets. You can’t come in at middle management if you are straight out of uni.”
iiNet managing director Michael Malone said businesses were feeling the effects of poor housing affordability because staff were wanting bigger pay packets to afford the mortgage repayments.
Mr Malone said that the problem was that, in the current skills shortage climate, young people could walk in to big-paying jobs and waltz into the big home.
“Why would they say no to that?” he asked.
TSG Key Group chief executive officer Dave Simmons believes Perth’s house prices will continue to head north and urged those not in the market to “get into the fire and get it under your belt”.
When he arrived in Perth in the mid-1990s he thought Perth was “Hollywood” because houses were so affordable after hearing about how unrealistic house prices were on the east coast for more than a decade.
And he thinks that Perth property prices will continue to rise.
“I have had a few of my mates saying that it is going to collapse but I don’t see that,” Mr Simmons said.
“I think it will crawl away from where we are at a nice steady climb up.
“There are a couple of the big companies from over east coming in to town and bringing many, many, many executives and they all have to be housed. It is not going to get any easier, so get into the fight and start powering on. If that does mean that you are not in the mansion, then that’s fine.”
