1 in 3 investors concerned about cost of living

August 30, 2017

Nearly one in three Australian investors are worried about the rising cost of living, according to new data.

Mortgage Choice's Investor Survey found the increasing cost of living was the biggest issue facing Australian investors over the coming 12 months.

“I am not surprised to hear that so many property investors are worried about the cost of living,” Mortgage Choice chief executive officer John Flavell said.

“Every day expenses such as gas, electricity, childcare, and transportation continue to rise every year, which is bound to negatively impact the hip pocket of all Australians, including property investors.

“On top of that, wage growth continues to stagnate, with the latest data from the Australian Bureau of Statistics showing wages grew just 1.9% over the 12 months to June 2017.

According to the Investor survey, one in five investors were also worried about job security, while a further 15% were worried about rising interest rates.

“Perhaps most surprisingly, our data found one in four investors were actually concerned about rising property prices. This would suggest property investors are constantly looking to expand their portfolio of assets and, as such, don't want property to become so expensive that it is out of reach,” Mr Flavell said.

According to Mr Flavell, there are a number of strategies investors can take to lessen the impact of the rising cost of living and rising interest rates.

“While you may not be able to control the inevitable rise in everyday living expenses or interest rates, you can control where you spend your money and how much money you save,” he said.

“With good strategic planning, you can ensure that you're able to afford your mortgage repayments and your lifestyle now and into the future.

“In the first instance, its pays to take the time to draw up a budget for your pay cycle, including all of your incomings and outgoings throughout that period.

“Make sure you are detailed so that you can identify where your money is going and where you may be able to cut back. It is important to set aside a regular portion of your income as savings. This money can then be used as an emergency fund for a rainy day.

“Moreover, whether you've had your mortgage for a short time or a while, it is always a good time to have your home loan checked.

“Your local broker can look at your current product and compare it with others on the market. They may be able to help you find a product with a sharper rate that will end up saving you thousands of dollars.”

Mr Flavell said investors wanting to make to make their money work harder for them should also consider speaking with a financial adviser.

“Even if you are comfortable with your current financial situation, it is worth speaking to a financial planner who can assess your financial situation and create a personalised plan to help you reach your goals.”