RateCity’s Sally Tindall’s ‘trick’ to beat soaring house prices

With house prices soaring dramatically over the past year, an expert is urging Australians to think outside the box if they want to find a way to get into the market. Here’s how.

With the cost of owning a home soaring dramatically over the past year, an expert is urging Australians to think outside the box if they want to find a way to break into the market.

With median house prices in Sydney spiking 23 per cent in the past year to $1,410,128, before dropping to $1,116,219 last month, owning a property in the Harbour City remains out of reach for most average-income earners.

Meanwhile, the average home price in Melbourne is $799,756 and Brisbane $722,433, still a daunting figure for most.

Incredibly, each month Australians are borrowing over $32 billion to spend on housing, almost double the $16 billion per month we were borrowing in 2018.

But many are struggling to save up for the 20 per cent mortgage deposit that’s required.

To get around this problem, RateCity research director Sally Tindall says potential buyers should consider purchasing with a family member or friend.

“The great Australian dream of owning your own home has become a nightmare for many first home buyers as they’ve watched property prices spiral out of control,” she toldSunrise

“Think outside the square.

“That could mean buying with friends, it could mean buying with family, it could mean buying somewhere else and renting it out.”

Consider buying with a friend or relative. Picture: NCA NewsWire / Damian Shaw

Tindall also recently talked about how median house prices are beginning to drop in Sydney and Melbourne, with CoreLogic’s home value index released in March finding that property prices had dropped by 0.1 per cent in Sydney.

“This could be the beginning of the end for the current property price peak in Australia’s two biggest cities,” she said.

“Property price drops will provide a reprieve for people hoping to get into one of Australia’s many overheated property markets, however, would-be first home buyers should crunch the numbers before they pop the champagne.

“If property prices fall on the back of rising rates, buyers might not need to stump up as much for a deposit. They will, however, need to make higher monthly repayments, which means they won’t be able to borrow as much from the bank.

“First home buyers should think carefully about overextending themselves in a market where rates are set to rise and prices are forecast to fall.

“Make sure you have a buffer to ride out any bumps.”

The Commonwealth Bank believes Sydney house prices could drop nearly $200,000 by the end of 2023.

Overall house prices are predicted to stall across Australia by May and to even drop by the end of December, according to Westpac, before a big decrease in the coming years.