How First Home Buyers Can Avoid The Stress And Trauma Of Australia’s Red-Hot Property Market
Originally published on Linkedin.
It has never been a more difficult time to try and secure that first home. First home buyers are not only up against the sheer cost of property in Australia (a typical 20 per cent deposit on a property selling for over a million is a massive savings effort for anyone, let alone those in the earlier stages of their financial careers), but competition for properties is fierce, and many people are missing out, even when they have access to the deposit.
A recent article on the ABC highlighted the emotional and psychological toll this is taking on first home buyers. “For over a year, Brisbane couple Eve Anderson and Jordan Roberts have spent every weekend at back-to-back open homes,” the article notes. “They’re unable to spend quality time together or with friends and family, she says, because every spare second is dedicated to the search. Their financial situation dominates every decision, she adds, which makes it difficult to strike a work-life balance.”
The stress comes from more than just the price of the property, and first home buyers have a lot to contend with. By definition, they’re inexperienced in the property market, and while they rely on the information that comes from agents, those agents are not their allies and many of them look to benefit from the inexperience of the buyer. Many first home buyers do become frustrated and disillusioned by the auction process, which can seem obtuse and counter-intuitive.
Cutting through the noise
There are a couple of techniques that can assist first home buyers in the current market:
1) Buy outside of auction
Purchasing a house before it goes to auction is generally the best way to get it on favourable terms and avoid the stress that comes with competing to win at auction. Finding the right property and successfully negotiating its price can be challenging for inexperienced first home buyers, which is why it’s a good idea to engage a specialist to have the additional firepower in your corner.
2) Consider making your first property an investment property
While most people want to move into the first home that they purchase, with the market running as hot as it is right now, a single property is an enormously expensive asset to maintain. For many young first home buyers, buying an investment property and renting that out, while remaining renters themselves, is a good way of turning the investment into a revenue source and helping to pay off the mortgage.
3) Resist the urge to purchase sight unseen
With the level of competition making the purchasing process seem like a race, many first home buyers will feel pressured into making a purchase sight unseen in order to secure themselves something to live in. Often agents will deliberately encourage this behaviour in order to avoid scrutiny on the property. Always find the time to have proper inspections undertaken, as it will save you a lot in costs, repairs, and stress down the track.
4) Be strategic, rather than scattershot
The most effective way to secure a property in an area that you want to live in is to become an expert in the unique qualities of that local market. Many people looking for their first home try and cast a wide net, working under the assumption that the more areas that they shop around, the more opportunities they’ll find.
Instead, you’ll find better success with persisting with a small ring of suburbs, being in constant contact with all agents, and making sure that you have a detailed understanding of the area and its dynamics.
There are few more important purchases that you’ll make in your life, and knowledge is king when it comes to property purchases. First home buyers are at a significant disadvantage in this regard, but at Hello Haus, we have assisted a number of first-time buyers cut through the misinformation and bad advice to land themselves a dream first home. Contact us for more information.