First Home Buyer? Three Things You Need to Consider Before Buying Your First Home
Purchasing your first home is the most significant purchasing decision you'll make in your lifetime. It’s a rite of passage, an Australian tradition and your birthright as an Aussie. By buying your first home, you'll be joining 9 million others living the dream. So here are a few things to consider whilst you go out house hunting for your very first home.
1. Your Home Will Rise in Value
Historically, the value of property in Australian capital cities doubles every ten years - do keep in mind this may not be the case for every suburb. Which suburb you choose to buy in can be the difference between mediocre, non-existent gains and absolutely stellar growth. So choose your suburb wisely and think in terms of distance from CBD and government spending in the area.
Furthermore, buying in the right suburb is no guarantee the value of your home will match this historical trend. Your future home should be close to the amenities: like restaurants, retail and railway as well as gyms, cafes and schools. How well you choose your suburb and location will determine how successful you are when it comes to our third point.
2. You Will Save Money
They say rent money is dead money, and better still, if you’re a first home buyer, you’ll be able to get a state-sanctioned cash boost of between $15,000 or $20,000 for homes purchased before the close of this year. Keep in mind this grant can go toward buying your new house, unit or townhouse.
Currently banks are mulling over abolishing fixed-rate-interest loans owing to the current economical climate, making it a strong reason for you to get into your new home sooner, rather than later.
Variable loans are at the mercy of market forces, meaning that your 3.79% interest rate could theoretically skyrocket to as high as 17% (which is exactly what happened in the 90s). We’re basically saying that you probably want to err on the side of caution and get a fixed loan.
Want to save even more of your hard-earned dough? By making an apartment your first home your cost of entry into the market is significantly reduced, and you can easily buy into high-priced affluent suburbs for a fraction of the cost.
3. You May Even Build a Property Portfolio
You may very well live in your first home for your entire life - that may be the plan - however, there is also the possibility that should you outgrow your home and decide to move, you might want to turn your home into a rental property (as opposed to selling) and continue to enjoy both the capital growth it gives you and the rental income it provides. In fact, owning your own home can help propel you to owning your second and third property, effectively tripling the potential growth of your budding property portfolio. Just remember to refer to our first point, and it will only be a matter of time before you're looking for additional properties.
So there it is, in a nutshell - there are many ways you can benefit by getting your first home. Just remember - if you want to get into your own home for less, there’s no better time then now.