With home prices falling in the Sydney and Melbourne property markets first-home buyers could find some big opportunities, especially if they have their deposits ready now. Throughout this year, most real estate pundits believe property values in the capital cities will stay relatively flat in 2019, even though Domain’s Property Price Forecast(1) has some cities possibly posting modest gains. There’s also less competition for first-home buyers with many would-be investors having left the market after the banks tightened their lending practices and reduced opportunities for short-term capital growth. In this scenario, first-home buyers have an opportunity to buy a property before prices start to rise again.
If you’re a first-home buyer, the first and obvious rule of thumb is to find out and understand your borrowing power especially now that the banks have tightened their lending practices, and do this before you got too far into your property search. The fact is what you might have been able to borrow six to eight months ago is nothing like what you might be able to borrow now. Also, not all markets are the same – there isn’t just one market but lots of different ones in different locations. This means you should understand the market in your local area, but don’t feel pressured into leaping into the market, but also don’t wait for prices to fall further. There will be some good prices in the capital cities, but if you are waiting for a further correction, it might not come.
Getting your first property choice correct is important for first-home buyers if they want to make sure they have one with the best chance of growth. Look for lots of natural light, a good floor plan, and a good backyard, and choose one that’s close to schools, transport, and shopping. Should you be looking for an apartment, make sure it’s also well located, has a car space since this will give it more resale value down the track. Another point is to be realistic. Don’t expect your first home to be the one you’ve dreamed about if your finances don’t match up. Your first home doesn’t necessarily have to be the one you’ll have for the rest of your life, just something that’s comfortable and one you can afford. “
In a nutshell, don’t buy what you can’t afford or what the property is worth. It does happen. While a slump might bring lower prices, it can also bring fewer properties of high quality to the market. Sellers might decide to hang on to their homes until the market improves, so first-home buyers should resist a great bargain that turns out to be a bad investment. Those most heavily discounted in a slowdown are properties on very busy roads. Finally, the advice is to keep on saving for your deposit, so you have a smaller loan, hence smaller repayments.
If you’re ready to apply for your loan for your first home and want to see your money doing good in the world, then choose Pearl Financial. As a B1G1 Business for Good, we incorporate purpose and meaning to our business through giving. Thanks to our clients, we are able to make a great difference in the world simply by doing what we do every day. When we settle a loan … We plant 10 trees to support reforestation in Borneo. When our parent company, Pearl Finance Group, onboards a new client … We give 7,300 days of access to life-saving clean water to families. When our Managing Director, Shane Black, connects with someone on LinkedIn … We provide one day of access to school books to an orphaned child. Call us today on (02) 9600 8334 or email firstname.lastname@example.org.
Kym Wallis, the founding director of Higher Ranking has over 15 years of advertising sales, digital strategy, and business development experience. He is currently working as Digital Adviser for Vergola NSW.
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