Real estate Australia: Homeowners forking out thousands in hidden costs

Homeowners are parting with plenty of dough in unexpected costs when they sell their house – and it’s got nothing to do with the property itself.

Home sellers are forking out thousands of dollars in temporary accommodation.

Homeowners are forking out thousands of dollars on temporary accommodation while waiting to buy a new home as a national rental crisis intensifies.

Data from bridging loan specialist Bridgit showed Aussies spent an average $8,300 on temporary living arrangements, including moving and storage of belongings in the period between selling an existing property and purchasing a new one.

The figure is close to the yearly cost of a 2.5 per cent rate hike on the average $500,000 home loan.

Home sellers often turn to renting while they search for their new home.

More than half of respondents (52 per cent) in the nationally representative survey of 1,011 sellers had to find a temporary home while they waited to buy their next property, with 26 per cent of respondents needing to move into temporary accommodation twice.

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Younger sellers were more likely to fork out for temporary accommodation, with 100 per cent of under-25s and 63 per cent of 25-34-year-olds doing so compared to 49 per cent of 55-64-year-olds, and 39 per cent of those aged 65-plus.

Stiff competition makes buying and renting all the more challenging.

The survey found that half (50 per cent) of homeowner respondents said they would have preferred to buy their new residential property before selling their existing one.

Data from comparison site Finder shows a borrower paying the average variable rate of 3.45 per cent on a $500,000 loan in April forked out an additional $8,820 in yearly mortgage costs following a 2.5 per cent hike.

Bridgit CEO and co-founder Aaron Bassin said sellers were facing tight rental conditions at a stressful time in the buying process.

Timing the new purchase right can be cause for celebration.

“The process of buying, selling and moving homes is stressful enough in the best of times, without having the added burden of paying additional expenses and finding temporary accommodation,” Mr Bassin said.

“With the cost of renting rising and many cities and regions across the country experiencing a rental crisis, it is an avoidable part of the home buying journey.”

The latest figures from PropTrack showed rental availability plummeted across the country last month with listings down 32.8 per cent in Melbourne and 24.2 per cent in Sydney despite demand surging in both the capitals.

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Originally published as Real estate Australia: Homeowners forking out thousands in hidden costs