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As Australians, we love buying property. Some would say it’s a marker of adulthood. Some of us will juggle multiple jobs and squirrel away as much money as possible to get into the property market. It’s such a big deal that it has become a point of contention between the generations.
In some other countries, home ownership isn’t as big a deal as it is here. For example, some countries in Europe have rental leases that last a decade or two. Australia is amongst the countries with the highest home ownership in the world. This also means we have the highest level of household debt globally, but on the flip side, our interest rates are the lowest they have ever been. This theoretically means that our mortgages should be manageable.
We know, there are a lot of mixed messages here. Should you be saving for a downpayment? Is buying a house a bad financial decision? We have collected six tips for you to consider before signing on that dotted line.
Many young people are prone to going after instant gratification. In the property market, this often means buying their dream house immediately. You don’t enter the workforce as a CEO - you start at the bottom, and you work your way up. Think of the housing market in the same way. Begin with buying a cheaper home. Maybe it’s a bit smaller than you were anticipating. Perhaps it’s further away from the city than you’d like. Start small so you have room to grow. Remember, you don’t have to stay in your first home forever! Selling and moving on to a larger or more central home is always an option.
There are lots of costs involved with owning a home. Be sure to do your research on every aspect. Body corporate fees can be a huge cost when owning a home. For example, places with a pool or an elevator will have higher body corporate fees. Get to know the neighbourhood. Is there public transport nearby? Are crime rates low? Doing the research beforehand could save you from a lot of heartache later on.
The media have a field day promising an upcoming market crash every other week. Be wary of these stories, as they are often used as clickbait. The housing market is something you do not have any control over, so don’t plan around the apparently inevitable crash. Don’t let the short term market fluctuations impact your long term financial decisions.
One of the most important steps when buying a home is ensuring it is structurally sound before signing that contract. Have a professional building inspector come in and ensure your new home doesn’t feature any major structural issues, water damage, or termites. This could save you a bucket load of cash in the future.
There are lots of websites you can use to ascertain the value of your potential new home. Have a look at what it has previously sold for, and the cost of neighbouring properties. A quick Google search will give you all the information you need to ensure you aren’t being taken for a ride by the seller and their real estate agent.
If you are looking for your new home and find a place you deem perfect, don’t let the real estate agent know. Agents will always be keeping a close eye on how you react to certain homes, and will use this knowledge to get the absolute most money out of you in the case of a sale. Keep in mind that every home will have its pros and cons, and there are many out there that will suit your needs.
With these six tips in mind, we hope you can make the right decisions about entering the property market! But this in just the beginning. If you’re ready for the next step, check out our blog post on choosing the right mortgage for you.
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