Even though there has been speculation over real estate price declining in Australia, and investment numbers dropping, the dream of homeownership is still very much alive. In fact, according to a recent survey even overinflated property prices and job uncertainty hasn’t deterred would-be home buyers.
Renters, who have no investment property, recently stated in a home buying survey that they wanted to buy their own home within the next 5-years. Of this number of renters, only a quarter said they’d still be renting in 5-years. Real estate agents suggest that while current buying conditions and the Australian economy make it harder for first-time home buyers to break into the market, many were still determined to buy.
Around a fifth of renters surveyed earned more than $100,000 per year. So it was not a matter of income that prevented them from purchasing a home.
Real estate agents said that it was not just income that prevented people from buying property. Typically, renters with a higher level of revenue chose to rent because they liked a particular type of lifestyle, and they could not afford to purchase a property where they are currently renting.
Some 29% of renters surveyed said they rented due to lifestyle choices. Many of these renters stated that they chose to live where they did because they were close to friends, CBD shopping, restaurants and work.
Housing affordability was the main consideration for prospective home buyers with many seeking to buy a home in a suburb within commuting distance to the CBD. Some of the most popular areas in Australia included Richmond, 3.5km on the coastal side of the Adelaide CBD, Glenelg East and Largs Bay, which are situated on the coast and under 20kms from the CBD.
Olinda and Templestowe were popular in Melbourne, with a median around $500,000 for a house. Olinda is situated approximately 45km from the CBD, with a home average of around $600,000. Templestowe, on the other hand, is 20 km from the CBD with a median home price of $1.175m; units hover around $660,000.
Some of the best suburbs situated within 50km of the CBD in Australia, which have a median of under $550,000, include the following:
|Suburb||State||Annual Growth 2015||Median March 2016|
For those looking to buy their first home, it’s important to know and understand the property market and what represents value. Having good market knowledge will allow you to buy well and save. It’s also important to familiarise yourself with home loans and for you to find out where you can save long-term.
If you’re unsure of mortgages, then visit a mortgage broker. An eChoice mortgage broker will explain terminology, and help you to understand different home loans and what they can and cannot do for you. They will also define home loan features. You can download your free home loan report here, which includes your borrowing power, the lowest interest rate available to you and how many lenders you qualify for.
To familiarise yourself with the property market, visit popular real estate websites and have a look at listings. Use a mortgage calculator and work out, based on your earnings, what you can afford to borrow. Then determine what you want in a home; the number of bedrooms, bathrooms, and the proximity to work and transport to and from work. Then make a list of suburbs and review these on the real estate site.
Also, determine what suburbs are affordable and which are not. Narrow down your selection, and don’t be afraid to look at neighbouring suburbs as an alternative. Just remember to start small, and work your way up. Your first home is a stepping stone to bigger and better opportunities.
Do you want to know more about first home buyer loans?Then contact eChoice and find the right home loan for YOU today.