The plight of the Australian first home buyer is challenging and it may only be getting harder. Fledgeling property owners accounted for just over 30.8 per cent of total new dwelling purchased over the first three months of this year – a record low since 2015, according to the National Australia Bank (NAB).
Despite these discouraging statistics, there’s no need to despair. Approach buying your first home with these alternative strategies in mind and you may find property-success sooner than you’d think.
The Australian Bureau of Statistics puts the average property price in the country at $656,800. It’s no wonder that 79 percent of respondents to a recent First Home Buyer Australia survey said that accumulating a deposit or housing unaffordability were the biggest challenges when buying.
One simple and effective method to make getting past this difficult first step is buying with others. Around 20 per cent of respondents in the aforementioned bought your first home with others it should be easier to buy your own in future. The fact is when buying with one, two or even three others you reduce the amount that you need to save and increase your buying power.
There’s more than one way to buy your first home. In fact, there are hundreds of different strategies that could make getting on that ladder a little easier. One is reinvestment: buying your first home as an investment and renting your primary residence.
NAB data suggests this is increasingly common: almost a third of first home buyers purchased property as an investment during the first three months of 2017. There are several advantages to this approach. For one, you’ll be able to buy without considering where you’d like to live (perhaps further out of the city where prices are more palatable).
You’ll also be able to buy property based purely on its profit-making potential – its attractiveness as a rental and the likelihood that it will increase in value. The equity and profits you accumulate using this approach can be used after a few short years to purchase property somewhere closer to the city where you’d like to live. Or perhaps even to leverage into another investment.
There’s no denying it; buying your first home can be extremely challenging and while you don’t have to give up avo on toast you will have to make sacrifices. Make it easier and get a leg up when you’re jumping to the first rung of the property ladder by getting the right professional help early on.
Mortgage brokers, real estate agents, financial advisors and other industry professionals can help make sure you’re making the right decisions. Why not consult a professional a year before you want to buy? So that they can advise what you should be doing to make yourself a better prospect ahead of time.
Don’t leave that meeting until the point at which you have found the house you love, get yourself ready and informed and you’ll be ahead of the pack.
Do this, and hopefully, with a little creativity, you’ll be on the way to pocketing a new set of keys.