Property Wizards was recently approached by The Sunday Times Real Estate Magazine to provide advice and savings tips for first home buyers.
Here’s what director Trevor Dunkley had to say.
With the Perth property market at the bottom of its cycle and interest rates still low – for now – it’s a great time for first home buyers to get into the market.
However, there are several things to consider when it comes to saving for that first home loan and being aware of the pros and cons of the government’s first home owner’s grant.
Everything in moderation
Although some younger first-time home buyers might get a bad rap for being part of the want-it-now generation, it is possible to still enjoy their lifestyle, while saving.
We recommend making moderate adjustments to your lifestyle – and/or living arrangements if you can – and put aside a set amount each month to towards your deposit. Making it a realistic amount is key – so you stick to it. If you make it too high, and deprive yourself of any lifestyle enjoyment completely, you won’t stick to it. Cut back on small things – weigh up wants versus needs.
If you can, live with your parents as long as possible, and if this is not an option, look for sharehousing or moderate rental housing.
Manage expectations
While there are affordable homes in Perth’s market, part of the challenge is in managing buyers’ expectations. Many first-time buyers have unrealistic expectations about the type of housing they can afford or location in which they can buy.
Start wherever you can – and buy smart
“Instead of focusing on a brand new home with all the trimmings or limiting your search to certain suburbs, start wherever you can, and buy smart. Take a long-term view and think about long-term growth.”
By adjusting their mindset, and therefore strategy, first home buyers’ expectations can be managed. That ideal property, with all the mod cons, in the ideal suburb, may not be their first home, but it can be achieved – it just takes time to get there.
FHOG – pros and cons
As the government’s first home owner grant only applies to new builds and targets house and land packages to stimulate new housing, it can make it difficult for some first-time buyers to consider lower-priced, second-hand homes in long-term growth suburbs or closer to amenities.
However, one option is to buy a new apartment, so they can still benefit from the FHOG, while getting into good areas, close to amenities. This could be a positive stepping stone to their next property, without compromising their lifestyle.
Innovative incentives
What might also be helpful is if the FHOG was extended to older, established housing to give first home buyers more options, and for banks to be more innovative and offer incentives specifically for first home buyers. This could include joint incentives for first-time investors whose parents are home owners, which would therefore benefit both the banks and the investors.
It is a great time to buy in Perth, particularly while interest rates are still low and the market is at the bottom of its cycle.
Get in early
Another great tip is for parents to encourage saving from an early age.
If parents teach their kids early in life about saving, and they start a savings plan using their pocket money and continue it when they get their first job, by the time they’re in their early twenties, they will be at a great starting point for buying a property. The challenge is staying focused on these savings goals, while still enjoying their lifestyle.
Thanks again to The Sunday Times for publishing our comments in this article:
