Millennials have been at the center of discussion around housing affordability for a while now. Cashed up investors in Australia’s capital cities are purchasing homes that go beyond a first homeowner’s budget, leaving young Australian’s stumped as to what happens next.
Experts are saying that a little less smashed avocado and a little more saving is all it takes for the Australian dream to be turned into a reality, and perhaps they have a point, however, there are other things you can do in the process to make this task a lot less daunting.
So in light of this, here are Call2View’s top tips for young Aussies securing their first home -
1. Research, Research, Research
Take the time to conduct thorough research. The process to find your perfect home can sometimes take months, or even years. Accept the fact that you are probably not an expert in the real estate field, and perhaps even consider working with experts even if it is a small cost.
At Call2View we are always willing to assist with those who are seeking guidance. Be patient and put in the hard yards, we promise it will pay off!
2. Have a strategy
There are plenty of ways to enter the property market - but you may have to start somewhere which is not your dream location.
The good news is that the housing affordability market has been over generalised in some parts of Australia. Sure, in capital cities such as Sydney, Melbourne and Brisbane, the skyrocketing prices make it significantly harder to afford a house. However in capital cities such as Darwin and Perth, prices have retreated back to where they were a decade ago, providing a golden opportunity for first homebuyers.
3. Do not go beyond your means
Always buy where you can afford to buy, even if it means buying further away from your home city, or an older style home that may not be your taste.
Consider whether it is viable to borrow your limit, as generally it is not advisable, as it does not protect you from unforeseen financial or personal events. This will also protect you down the track when interest rates do inevitably rise.
4. Create clear objectives
It is easy to be sidetracked and spend money on the wrong things. Creating clear objectives at the start of your search can eliminate this risk. For example, does the property have to be close to amenities such as schools, transport and social infrastructure? Be extremely detailed about the type of property you want, how much money you can spend and what your expectations are.
5. Save your pennies
One of the most debated topics in the current Australian political climate is how young people will save enough money to break into the housing market. The task can seem like it is mission impossible. But not if you start saving NOW!
Lenders seek evidence of consistent savings over time. Put away a percentage of your income every week and stick to it. Most banks will require a 5% deposit of the purchase price of the home.
And… make sure that your credit rating is squeaky clean to ensure that you have the best possible chance to be approved and also land the best possible interest rate.
6. Learn how to negotiate
This can be a somewhat daunting task, and something that young investors may lack confidence in. If you can master this skill, you not only increase your chances of securing a cheaper deal with the property, but also any renovations that you might require builders for.
7. Understand and take advantage of growth cycles
What goes up must come down! If you are currently planning to buy in one of the capital cities, it is best to hold off, as economists are promising that these periods of growth are often followed by periods of weakness. So when this period of weakness returns, it will provide a great opportunity for buyers who will be able to purchase property at a lower price than what it is currently.
Remember that we are always free for a chat - give us a call on (08) 8932 8858 today.
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