Home prices continue to climb across Australia. In October, national dwelling values rose 1.1% - the strongest monthly gain since June 2023.
Several factors are fuelling the uptick in growth. One is the lack of housing supply in many markets. The expansion of the Australian Government’s 5% Deposit Scheme from 1 October also saw a surge in first homebuyer activity and added demand to the lower and middle price points of the market.
The scheme has made it easier for first home buyers to get into the market with a deposit of just 5% (without paying LMI). However, it’s important to understand the risks involved. If the property’s value drops, borrowers could get caught in negative equity territory.
That’s why it’s so important to purchase the right property for your needs in the right location, without overspending. Here are some tips so that you can approach the market with confidence.
1) Do your research
Thoroughly research the area you’re looking at buying in. Check out the median prices, recent sales, capital growth trends, access to amenities, planned developments, population growth and local employment.
These insights will help create a clear picture of the suburb, what you can expect to pay, and how you can anticipate your property might perform.
Tip: Ask us for a free suburb report to help inform your decision making.
2) Get familiar with the market
It’s extremely rare to find the right property the first time you do an inspection. Usually, it takes a few goes to get a feel for the market and know what you really want in a home. So, be prepared to dedicate several weekends to open houses.
You could even check out some auctions to see how they work. It may give you insight into the kinds of buyers you may be competing with.
Once you do find a property you like, look for any intel around the neighbourhood that could be used as a negotiating tool. Street noise, perhaps? A dodgy-looking house on the corner? Anything that affects the appeal of the property is a potential bargaining tool.
3) Have your finance ready to go
A finance broker can explain your borrowing capacity and organise pre-approval on your finance. Pre-approval is an in-principle estimate of the maximum amount a bank is likely to lend to you.
Having pre-approval in place helps mitigate the risk of overspending and gives you confidence during the negotiating or bidding process. It also shows the seller that you mean business and are actually serious about buying.
4) Walk away if necessary
When you fall in love with a property, it can be hard to walk away if the price is out of reach. However, it’s important not to let clever marketing tactics like a beautifully staged home trick you into paying more than you need to.
If the vendor won’t budge on price, you may need to look elsewhere.
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