Whether you’re scrolling through your social media feed or tuning into the nightly news, there’s no shortage of doom and gloom going around.
But while rolling lockdowns and restrictions have taken their toll on many industries, real estate has emerged relatively unscathed. If anything, the pandemic has fuelled an already prolific property bubble, creating a new kind of market in which demand and prices have skyrocketed.
While this is great news if you’re planning to sell, where does it leave would-be first home buyers hoping to get a foot in the market in competition with cashed-up investors? The short answer: it can leave you feeling like giving up.
Well, we’re here to tell you otherwise and encourage you not to lose hope because buying your first home can be a lot easier than you think. How so?
First things first. While the market continues to soar sky-high, choosing to build new can be a viable option. Home and land packages tend to be a bit more affordable than buying an existing place. And given that a construction loan typically allows you to pay interest only during the build process, it also buys you time to bank some decent savings.
What if my piggy bank is a little empty to begin with?
Sure, not all of us are lucky enough to get a cash injection for a deposit from the ‘Bank of Mum and Dad’. Many of us need to get stuck into hardcore savings to get where we want to be. But, again, it can be easier than you think. And once you start saving – and building towards a big life goal like your very own home – it can become kind of addictive.
Here are some tips to help you save for a deposit:
- If moving in with your parents is a no go, consider flatmates; more people paying the rent means more savings in your pocket.
- Speaking of rent, it’s worth shopping around to see if you can get a better deal by moving. If you can, bank the difference.
- If you can’t quit retail therapy, learn to love second-hand.
- Having dinner at home can be just as much fun as eating out, but a lot cheaper (the same applies to having coffee at home).
- Set up your pay to go straight into your savings account. Dipping in will make you second-guess how much you need to.
- There are heaps of easy to use apps out there that tally up where all your money goes, and your bank probably has loads of advice on their website too.
You can read more from us on how to navigate your saving journey here and here.
But a deposit is a lot of money, right? How long will I have to save?
Probably less money and time than you think. Most states have specific first home buyer grants you can apply for (free money for the win!). It’s also possible you’ll qualify for certain exemptions, like dodging stamp duty altogether. Which is a considerable saving, trust us.
You might also be able to access the federal government’s First Home Loan Deposit Scheme. For those who are eligible, it allows you to get cracking with only a five per cent deposit instead of the customary ten, with the peace of mind that the government has your back.
Another important thing to consider is that you don’t need a substantial deposit to get started on your home building journey. If you qualify for the First Home Buyers Grant, HomeSolution by Metricon has a low deposit option available that could get you on your way to homeownership. What’s more, our knowledgeable and nurturing team of New Home Advisors and Financial Partners will guide you through every step of the journey, ensuring you understand the government grants and exemptions you can capitalise on while helping you stick to a realistic savings plan. Find more info about HomeSolution here.
If you can’t beat them, join them
One last thing to consider: maybe those cashed-up investors aren't the enemy of first home buyers after all. Perhaps you can follow their lead. It’s a little-known fact that you can skip over homeownership and head straight to building a property portfolio by opting to rentvest.
Rentvesting means living where you love by renting, then building a new home somewhere more affordable and letting it out to tenants. They can cover your mortgage, and the equity that builds up could eventually allow you to look at buying your own place to live in.
So, where to from here for first home buyers?
A good place to start is to digest as much information as you can, which you’ll find here.
You can also read the testimonials of two first home buyers here or meet some of our many happy customers here. And keep your eye on our upcoming events page for our next online first-time builder advice session.
Please bear in mind, this is just general information. It pays to seek independent financial advice if you are considering buying your first home.
If your advisor reckons it’s a good idea for you, you can get in touch here.