Decreased housing affordability to affect retirement
Becoming a home owner in Australia is even more of a distant dream with a drop in housing affordability, according to reports by Adelaide Bank and Real Estate Institute of Australia (REIA).
The December quarter report found that the proportion of family income required to meet loan repayments increased by 1.1 percentage points to 31.5 per cent.
Adelaide Bank general manager, Damian Percy, said that development of public policy could help ease the supply side problems that were currently putting pressure on housing affordability.
Commenting on arising future issues Percy said that there would be negative longer term outcomes such as retirement savings adequacy.
"Quarterly studies such as the ASFA (Association of Superannuation Funds of Australia) Retirement Standard assume that people own their own homes when calculating the amount needed each week for a comfortable life in retirement," Percy said.
Reports by ASFA has found that single retirees will need $430,000 in retirement savings and couples will need $500,000.
The affordability report found the ACT was the most affordable state or territory for home buyers, and NSW was the least affordable with an average loan size above $400,000.
Recommended for you
A Supreme Court of Western Australia jury has issued its verdict regarding unregistered MIS operator Chris Marco, who was on trial for 43 fraud charges, with ASIC stating the verdict ends a “sorry chapter”.
ASIC has released the results of the latest adviser exam, with August’s pass mark improving on the sitting from a year ago.
Financial advice practices may be hiring younger or professional year advisers as a succession option, but they may find they are unable to put up the capital if the adviser looks to retire.
Any changes to product labelling for sustainable funds must be applied consistently across investor channels, including those used by financial advisers, according to RIAA.
