The changing Australian dream: we want it all

The great Australian dream used to be the quarter-acre block, a car in the garage, a BBQ and a couple of kids playing backyard cricket.

But according to new research this dream is changing, and we’re now aiming for more: much, much more. But are our aspirations grounded in reality?

The changing Australian dream

The annual realestate.com.au Housing Affordability Sentiment Index (HASI) survey for 2014 has revealed property is still pivotal to the great Australian dream, just not in the way you might think.

Instead of simply aiming to buy and pay off the family home, many Australians are looking for bigger and better things and working towards several property goals – including a primary residence, holiday home and investment property.

The research shows 32% of homeowners had a goal to buy another home, and most hope to do so within the next five years. Half of those who did not own a home were hoping to buy, mostly also within the next five years. And 23% who did not own an investment property were hoping to buy, also within the next five years.

Australians want a primary residence, holiday home and investment property.

We want more than just property

But it’s no longer just property on the list. Aussies say overseas travel and cars are also high on their list of saving priorities.

Among those surveyed who said they plan to buy a residential property, 62% also expect to travel overseas and 39% expect to buy a new car.

Of those who already own a home and plan to buy another, 77% also want to travel overseas in the next five years. And 68% of those who do not own their home but are hoping to buy also want to travel overseas.

How will we pay for it?

How are we all going meet, and fund, these bigger dreams?

Aussies are open to many different strategies in order to achieve these financial goals and lifestyle aspirations.

Around 13% said they’ll work two jobs, 12% plan to draw from other financial assets, 6% may sell valuables, and 4% would consider leasing out a room once they’d bought a property.

Aussies will work two jobs, use other financial assets, sell valuables and lease out a room.

Almost half, or 48%, are willing to increase their level of debt by more than 10% in order to buy property while 25% would consider buying with a friend or family member.

And despite wanting to have it all, property remains number one, with many willing to make sacrifices like giving up spending on luxury items (65%) and car upgrades (64%), in order to attain their property goals.

While fewer than 35% of those surveyed are willing to sacrifice property features (except having a pool), 56% said they would be willing to negotiate on location and buy or build more than 10km outside of their ideal location.

We are cautiously optimistic

According to the HASI results, 71% of respondents own at least one residential property, one in eight Australians were looking to buy a residential property at the time of being surveyed and 3% were looking to build.

Overall, the survey shows that the sentiment towards housing affordability has dropped, but that Australians think their financial situation has improved over all.

Sentiment towards housing affordability has dropped, but financial situations have improved.

On average, Australians reported a deterioration in their financial position over the past six months but there has been a positive shift in this over the past two years underpinned by improvements to household savings, household bills and expenses, and household debt positions.

Back to reality…

So the Aussie dream is changing: we’re ambitious and we’re restless and don’t seem willing to compromise. Are these upsized dreams realistic for the average Aussie? Or are we putting too much pressure on ourselves?

James Gerrard, a Financial Advisor with PSK Financial Services in Sydney, says many people come to him with similar dreams of owning their own home, plus investment properties, cars and enjoying overseas holidays. But he says the reality is that few people achieve it all.

Are these upsized dreams realistic for the average Aussie?

“It’s the dream, but in reality I don’t see it occurring a lot,” Gerrard says. “Relative to people’s income property isn’t cheap around Australia, so it’s hard enough to buy a house. Then it’s harder to do all those other things, to have enough cashflow to make your mortgage repayments plus buy a car, go on holidays, and buy an investment property.”

As a financial planner, Gerrard sees that people are really stretching their finances.

“Most people I see are running their finances pretty tight these days. A lot of it is a function of the property market,” he says.

For Gerrard, it’s about achieving a balance between a big investment in property and discretionary spending on cars and holidays.

“On one hand they could save everything and get into the property market sooner but on the other hand they’re not really enjoying themselves,” he says. “People need to have a balanced life, so still enjoy themselves: spend some money on discretionary things but realise it pushes the homeownership path down the track a bit.”

So what does the great Australian dream look like for you? And what would you sacrifice to get it?

The changing Australian dream: we want it all