Perth couple with $173,000 saved ‘devastated’ they can’t buy a house in Western Australia

Sharon and Mike have spent seven years saving up to purchase their forever home, but skyrocketing prices mean they keep striking out.

It’s a grim outlook for first time home buyers around Australia as house prices continue to soar and the problem is not just happening in cities like Sydney and Melbourne.

Perth house prices are forecast to jump by 19 per cent this year, according to ANZ economists, with auctions swamped by more than 100 people attending.

It’s a scenario that Perth resident, Sharon, who didn’t want her surname to be used, knows all too well.

The mum-of-three has saved up $173,000 with her husband, Mike, in the last seven years. The plan was to save until December last year and snap up a house in the $950,000 range. But as property prices skyrocket over in the west, Sharon is wondering if the dream of owning a home is ever going to happen.

The couple are currently renting in the “leafy green suburb” of Wembley and also want to buy in that area as their kids, who are 16, 14 and eight, are established in schools.

“We have seen a mortgage broker and he told us we could in theory borrow up to $1.6 million, dependant on our salaries, but he said it would be ridiculous so please don’t do that,” Sharon told news.com.au.

“We had decided that $950,000 was what we were aiming for.

“We could get a duplex in Wembley for $950,000, so needed to save $170,000, which was $135,000 for a 15 per cent deposit and $45,000 for stamp duty and now in the last year a duplex in Wembley is $1.4m – it’s just astronomical and nothing has a price tag attached to it. It’s all auctions and offers and people are paying $200,000 over the reserve price.”

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Perth’s property market has been booming with houses increasingly going to auction. Picture: Birdseye View Photography

They have spent the last three months looking for a forever home but prices have just become less affordable, she said.

The family decided they would stretch their budget to a house in Subiaco, which was marked to sell for $1.1 million. But the opening bid started at $1.4 million, instantly knocking them out of contention, before it eventually went under the hammer for $2.5 million.

“With all the real estate agents, you have to make friends with them so you get on list and see houses before they are advertised on realestate.com.au, but even if I had the money I would have to pay $200,000 more than houses are worth to actually get them,” she said.

Another auction they attended was a “bulldozable” house on an 800sq m block, which sold for $2.55 million, Sharon said.

“I was so disheartened. I was so devastated I literally thought this was the year we were finally going to have our own home and its just blown out of the water again,” she said. “We have decided we are not going to buy a home and keep on renting and hope we can keep on renting for the next few years and there is a dip in the housing market again.”

Their rent has just been increased by $50 a week meaning the family is now forking out more than $2400 a month.

“We have two professionals – one is a principal of primary school and one is working school hours full time as a sonographer and we can’t afford to buy a house, which is ridiculous,” she added.

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The couple have $173,000 saved but can’t find a home for their three kids and are facing renting for the foreseeable future. Picture: iStock

Sharon said it has been seven years of sacrifice – turning down dinner invitations, no big birthday parties for the kids and not chucking her son $20 when he heads to the skate park on a Saturday afternoon. The couple are currently able to save around $1700 a month, depending on the outgoings that month.

“I don’t know if we will ever be able to buy a house. We might have wait until the kids move out and buy a two bedroom home somewhere that we can retire in, which really isn’t what I want,” she said. “I want a family home for the kids that they can come back to anytime but that’s not going to happen unless I get a windfall.

“Even if we had to get a two bedroom house – so the kids have been brainwashed that it’s OK to share a room for a few years – even if we could get a two bedroom house that was lower in budget and renovate and extend to put extra bedrooms into then we would do that.”

With the couple in their forties, time isn’t on their side either.

“They are not going to give us a mortgage at 55, even if we buy in 10 years time when the kids have moved out of home, we are going to have to make such massive repayments to pay off in 15 years that I don’t even know if we will be able afford it then,” she said.

Fremantle, Scarborough and the Perth CBD – which is popular for professional workers. Picture: Birdseye View Photography

But Sharon is doing the best to ensure their kids aren’t put in the same position.

“I don’t want them in this situation. I said they have got $5 a week pocket money and if you want I will give you your pocket money but if you don’t spend it I’ll give you $10 a week and I’ve got $1000 for each and I’m putting it into shares,” she said.

“So hopefully they have deposit for small apartment when they finish university so they are not in the position that we are at 46 or 47 as it’s so stressful and disheartening.”

Sharon believes the property system in Australia has to change because unless you bought a house 10 years ago, people are “struggling”. She wants to see stamp duty dropped or the limit for first home buyers abolished.

“I think the first home buyers grant … shouldn’t be capped to buy a house in Perth at $565,000. I would have to live so far outside of the city. I would have to change jobs and change all the kid’s schools – it’s almost punishing the people who are working in the city,” she said.

“It’s great if you want to live in a Legoland housing estate that you don’t have to commute into a city and you can live on a wage that you earning in a local area but if you’re commuting to go anywhere into work it’s not possible to buy something worth $565,000 in Perth. I would be sitting in car for hour to get to work in the morning and afternoon so my kids would be missing out.”