Perth, WA - Every year, more and more South Australians receive repossession orders from the Supreme Court. In 2013, the figure was 134 individuals who lost their homes, due to rising unemployment and high housing prices.
South Australia has one of the highest rates of unemployment. In May, it was recorded a full 1 per cent above the national average, at 6.8 per cent unemployment.
Shelter SA executive director Alice Clark explained, “The supply of affordable housing in South Australia is a very pressing issue that calls for changes to the housing system rather than piecemeal schemes like the first homeowners grant.”
The number of repossessions increases every year due to housing stress. It was up from 128 repossessions in 2012 and only 123 in 2011.
Many Australians are paying a lot on their loans. In South Australia, it is common to pay up to 30 per cent of one’s income on loans and mortgages. Various surveys over the past few years suggest that more than 40,000 households across Australia suffer from housing stress.
Yet home ownership is often the only option for families. Renting can be just as expensive, especially in Australia’s expensive capital cities. Even after renting for many years, families have nothing to show for the money they invest into a rented apartment.
On the other hand, families who decide to finally take the plunge and purchase a home have a valuable asset for the future.
Risk of Repossession
Before taking on debt for one’s first home, it is important to understand the risk of repossession. Families should always plan accordingly. Income, credit history, and expenses are all important factors that go into home loan eligibility. However, even families that have all their finances lined up exactly may be at risk of repossession.
The best thing to do is to prepare all finances accordingly, even before taking out a loan, signing paperwork, or submitting a down payment. Knowing that there is always a risk can help families create a wide enough buffer for times of financial difficulty.
It may sound gruesome, but with the rising costs of housing and higher than average risk of unemployment, creating a buffer for one’s mortgage payments is financially savvy.
Choosing the Best Loan
Studying the difference between variable and fixed loans early on can prevent against financial crisis. Better yet, talking to a financial advisor can help families understand and prepare for the risks.
About Aveling Homes
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