While real estate values at the elite end of Australia’s market are experiencing a slight dip, that’s not true for properties being targeted by first homebuyers or investors.
At the affordable end of the housing and unit markets, prices rose 0.5% in October, according to the latest data from industry researcher CoreLogic.
First homebuyers and investors are battling it out in these affordable segments, which has stabilised price averages across the country.
In our local area, we continue to see pent-up demand among first homebuyers, and investors who cashed out at the peak of post-Covid price boom and now want to be back in the game.
Despite the somewhat sobering media commentary on the market right now, the experience of first homebuyers is significantly different.
Competition is fierce and prices show no sign of retreating for smaller detached homes and similar sized apartments.
However, the challenge is not impossible for first homebuyers.
Below, our agents have outlined a number of tactics and strategies to help you break into the market. We hope you find them helpful.
Your Deposit: You don’t need a 20% deposit, but the larger the sum you bring to the table the better. If you hit the 20% threshold, you can avoid taking out Lenders Mortgage Insurance (LMI), an expensive policy that protects the lender against you defaulting on your loan.
Cash Ready: Get pre-approved for a mortgage so you know what you can afford. This will help you act decisively when you find the right property. Be aware that these usually last 12 weeks and must be renewed. Don’t waste money by spending extra on locking in your interest rate for this period.
Helpful Schemes: Explore first homebuyer grants and schemes that can assist with your deposit or reduce stamp duty.
Budget Properly: There’s more to buying a property than paying the asking price. Stamp duty, legal fees, moving costs and potential renovation expenses should be included.
Go Exploring: Be open to new residential areas that might be more affordable. As prices continue to rise, you’ll benefit from exploring neighbouring suburbs that might offer better investment returns in the long run.
Property Options: Don’t be rigid in your choice of property type. If you’re finding detached homes beyond your budget, investigate townhouses and apartments. Sometimes, these are better first-home options.
Think Long-Term: Choose a property that suits your current needs and lifestyle, but also consider your future plans. View your purchase as an investment so that even if the market slows in the short term, your property’s value will appreciate over time.