Consumers are especially concerned about being able to earn enough to cover the cost of utility bills. Many also expressed concerns with lack of job security and poor economic management skills of the Australian Government.

Survey participants have stated that over 50% have had to access their savings in order to cover the cost of living and repayments for car loans, home loans, credit cards, rental, school fees and day-to-day bills. Consumers look for debt consolidation loans to help them maintain control over their bills and repayment obligations.

Almost 10 per cent have of the 1086 people surveyed said they have saved more to combat the price hikes.

When asked about their confidence in the Australian economy for 2012, 56 per cent were “fairly confident” or “very confident” (compared to 75 per cent in 2010), 20 per cent were “a little worried” (compared to 11 per cent), 19 per cent were “not worried” (compared to 13 per cent), and 5 per cent were “very worried” (compared to 2 per cent).

“Year on year confidence in the Australian economy has declined, however, it is good to see the majority of Australians still see a positive economic outlook for 2012,”

Despite the low levels of consumer confidence one in five consumers has stated that they intend to take out a home loan during 2012 and 9 per cent of mortgage holders plan to tale out new home loans.

Gen Y was the most positive about the economy and purchasing property,

Most people interviewed ie, 86 per cent feel say the rental squeeze is having an effect on property prices in their state.

Three out of ten consumers believe Australian property prices will increase over the next 12 months, The same number believe that they will decrease and the same number believe that they will remain the same.

In terns of a buffer for their home loans, 67% of respondents only have enough savings to cover 2 months of home loan repayments.

New data reveals 80 houses are repossessed a month, while up to a third of people in the worst-hit suburbs are struggling to cover rent payments.

The rental stress epidemic has engulfed NSW, where up totals of the families experiencing rental stress have to forego purchasing essential items such as food.

Borrowers who can not meet their home loan repayments generally have their homes repossessed by the lender. The number of people whose homes were repossessed by banks during 2011 has soared by 22.5 per cent.

In the 10 months to November, the Supreme Court issued 2466 writs of possession, with 825 executed.

Many more people are unable to afford their home loans and are putting them up for sale to avoid bank repossession.

However given the recent declines in property prices, not every home owner will be able to sell their home for enough to repay their home loans. First home buyers who had only purchased recently and borrowed up to 95% may find that they have no equity in their home and are unable to sell it for enough to repay their mortgage.

New modelling commissioned by Australians for Affordable Housing reveals the worst hit areas in NSW for housing stress are Sydney, Wyong, the mid north coast, the Hunter and far north coast with one in five families paying most of their income on rent or mortgage.

Across Sydney, those in Auburn, Fairfield, Canterbury, Strathfield, Bankstown and Liverpool are the hardest hit, with up to 28 per cent in those areas suffering housing stress.

The Newstart allowance has been cut right down so that even in the cheapest city of Australia the unemployed find themselves needing to survive on $16.50 a day. According to reports by The Sydney Morning Herald, this issue was discussed at the current tax summit.

Peter Whiteford, of the social policy research centre at the University of NSW who was an economist for the Organisation for Economic Co-operation and Development, told a national tax summit the cheapest accommodation for someone seeking a one bedroom apartment was in Wyong on the Central Coast near Sydney or Melton South on Melbourne’s fringe.

“If you had an unemployment payment and rent assistance, after you paid your rent you would have $16.50 a day for everything else and looking for work,” he said.

Fourteen years ago the newstart allowance was 91 per cent of the single pension, today it is 65 per cent and is projected to fall to 33 per cent reported the Herald.

Considering the high prices of property across Australia, rent prices are unlikely to decline. It is no wonder that so many Aussies are struggling with high levels of debt, and are seeking debt consolidation solutions as well as loans to assist with small debts.

Mortgage Choice has experienced a boost of 2.1% in investor loan demand during March.

This represents the first increase this year and could be an indication that investors are beginning to return to property.

While the cost of living is going up and First Home Buyers are worried that they will not be able to afford home loan repayments if interest rates are put up, cashed up investors are not particularly concerned by the rates.

There are many more properties on the market than usual and less buyers to purchase them. Australians who are ready financially and keen to crack the market or build on their portfolio may find that some solid hard work sees them snap up opportune purchases while demand is low.

Potential investors know that they can do well in a market with low rental vacancy rates.

“Rents are rising at a faster pace this year while property values have steadied or dropped in many areas, so rental yields are on the increase. This all bodes well for people who research the market thoroughly, have a long-term strategy and are informed about their finance options.

Mr Abate said Loan Market has had 400% more commercial loan inquiries in June 2010 as compared to June 2009.

Banks are still being quite careful with loan approvals, but they will lend to the right type of client with a strong application.

Banks do look for borrowers in a strong financial position and properties that have a healthy growth potential. Loan market has seen a range of application for loans to purchase offices, retail premises as well as industrial properties.

Borrowers are finally recognizing the advantages of commercial property over residential property in terms of investment

Commercial property can often offer much better returns for investors than residential property and the tenants are usually on long term leases of three years or more. In fact new tenants often take up 5-year terms.

The rental yields can start at around 4-5%t, which is the top mark for residential and can go up to 7-8%. With commercial investment tenants pay most of the outgoings, therefore holding on to a commercial property can be significantly cheaper than a residential investment.

This year property prices are expected to peak in all states – therefore the sooner you buy the more you save.

Don’t put off that purchase
When looking to purchase a property, you should really look at the property lifecycle to determine the best time to invest. If you wait until the end of 2010, you could face exorbitant costs and limited supply.

The next downturn in the market may not occur for another couple of years.

Choosing your dream home.

Be logical and review the six major groups of investment fundamentals:

1. Location Counts: Does it have schools? Shops? Day care? Car parking? Major shopping area? Cafes? Sporting facilities?

2. Proximity to Transport: How do people get to work in that area? How far is it to bus stations or train stations?

3. Area Demographics: Look at the potential demand of the property by matching the household demographics to the property

4. How Rentable is the Property: Review the logical layout of the home, does it have good sized bedroom? Are there usable living spaces inside and outside, other features such as storage?    Even if you are buying for yourself, it is important to consider whether you could rent the property out should you need to do so.

5. Growth Potential: Is there an ability to increase the value of the property through renovation or development? Check the surrounding properties cannot become high density blocks of units.

6. Price Point: Stay within the 2nd and 3rd quartile of prices in the suburb for price and rent.  Do not purchase the best house in the street.

Keep in mind the following:

1. Take Emotion out of the purchase decision: Avoid buying with the heart and forgetting the head.

2. Look for Value for money not a bargain: Avoid buying that ‘bargain’ property – there are usually major negatives that will stifle growth. If it sounds too good to be true, it usually is.

3. There is no perfect property: Don’t miss good opportunities because you are waiting for the ‘perfect’ house. Every house will have trade-offs and compromises.

Good Luck!!!

IT’S a lie to say that numbers don’t lie. This is especially true in the real estate debate about whether you are financially better off renting or buying a house.

Crunching the numbers for this argument can produce almost any answer you like, depending on the assumptions made for factors such as interest rates, house prices, rental costs, investment growth and tax deductions.

And, of course, there’s the matter of trying to save up the tens of thousands of dollars it usually takes to build a deposit.

The “rent money is dead money” line is a fair claim in many cases, but things can get murky when the money saved by renting is invested elsewhere typically shares or an investment property that have tax incentives.

It’s easy enough to compare the basics. For example, Brisbane’s median asking rent for a house is $360 a week, according to a report by Australian Property Monitors. The median house price for Brisbane is $419,000, says the Real Estate Institute of Australia.

The interest cost of a $419,000 loan based on a 6.5 per cent interest rate is $524 a week, and for an 8.5per cent interest rate it is $685 a week. But the basics just don’t tell the full story.

Damon Nagel, managing director of property investment firm Ironfish, says most people don’t consider the long list of other factors that affect the renting versus buying decision.

He says people can benefit by owning investment property while themselves living in a rented residence, although these “rental investors” are uncommon.

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A combination of more renters looking to buy their own homes amid improved housing affordability, and landlords enjoying lower interest rates, led the median weekly asking rent for a house in Sydney and Melbourne to fall flat in the March quarter at $450 a week, data from  API shows.

But Brisbane still experienced rental growth in the March quarter, up 2.9 per cent to $360, just ahead of Perth, up 2.8 per cent to $370, 

“There is less tension there to get those rises,” APM economist Matthew Bell said.

“Plummeting interest rates have eased the pressure on landlords to seek increasing rents. The market has turned in favour of renters, who have real options to buy their own home.”

The unit market held up more than houses in rental growth, with asking rents for units in Sydney, Brisbane and Adelaide up between 4.2 per cent and 2.5per cent. However, Melbourne and Perth did not register any growth.

Darwin, one of the strongest-performing cities in the past two years, appears to be running out of steam, with unit rent prices down 5 per cent, while house rents were stable.

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