A new ING report into lifestyle behaviour reveals that home owners are becoming more adept at finding less conventional ways to overcome the stresses of upgrading.
According to ING’s Upgraders Homeownership Report, upgrading into a new home is as stressful as starting a new job, planning a wedding or becoming a new parent.
To combat the challenge, more than half (59 per cent) of respondents said they have, or plan to use, a stop-gap between selling their old home and buying their new one.
This is made up of almost a third (30 per cent) who have or plan to rent, while nearly a quarter (24 per cent) said they have or plan to move in with friends and family and 5 per cent have or intend to use a hotel or motel.
ING head of retail banking Melanie Evans said that there are a few moving parts to consider.
“Probably the biggest difference between purchasing a first home and upgrading into the next one is that, in most instances, you’re not just buying a home, you’re selling one too.”
She said that managing finances between these events weighs on the mind of the people involved.
“Taking on a larger mortgage and having to consider the needs of others, such as a spouse or children, that may not have been in the equation during the last purchase are additional things that upgraders may have to contend with.
“The fact that Aussie upgraders are making temporary living arrangements between selling and purchasing suggests their actions are very considered and done to help ease the financial stress of upgrading.”
The research found that home buyers are inclined to bring in flatmates to help ease the financial stress.
Almost a third (31 per cent) of people that upgraded last year took on a flatmate, and of this, 32 per cent were families.
“Aussies are very determined to pay down their mortgage as quickly as possible,” Ms Evans said.
“So it’s perhaps not that surprising they are taking on flatmates to help accommodate the extra costs involved with upgrading. For some, the financial benefit of renting out a spare room is of more value than the loss of privacy when a flatmate moves in.”
The survey shows that 82 per cent of mortgage holders are paying down more than what’s required most years and 45 per cent expect to pay off their mortgage at least five years early.
The research indicates that relocating states is a trend that could be on the rise.
One in five upgraders have moved interstate over the past year and more than half (51 per cent) of future upgraders are considering to do so within the next year.
Melbourne, Byron Bay, Central Coast and Brisbane are popular with both current and future interstate upgraders.
“A number of Aussies are looking further afield and purchasing well and truly outside of their previous or current locations,” Ms Evans said.
“But they’re not just looking for a sea change, they also want to be near to a city centre and areas where there’s likely to be lots of activity. These towns are also likely to have employment opportunities and this may be attracting upgraders.”
The research found that most upgraders are not willing to give up on socialising and date nights, with just one in four indicating they are prepared to cut back on these activities.
Ms Evans said the findings are illuminating.
“What this research suggests is that Aussie upgraders are thinking carefully about their next purchase and not rushing their decisions. They’re taking on inventive measures to upgrade, and this is enabling them continue doing the things that matter to them, like date nights and spending time with friends.”