SPLURGE OR SAVE? What Alternatives Exist For First Time Buyers

BUYING

23 Aug

Owning your own home is a big part of the Australian dream, right?

Unfortunately, sky-high property prices and stricter lending rules are making it a lot harder to achieve. I get it if you feel like you’re having to put your homeownership plans on hold. But don’t worry, there are still options out there. Let’s explore them together.

Live Now, Settle Later.

More and more people are choosing to focus on experiences rather than buying a home. Instead of saving up for a big house, many people are spending their money on travel, hobbies, and personal growth. Some people are also investing in things like stocks or cryptocurrencies, hoping to make more money than they would from owning a home. Others are enjoying their lives right now by treating themselves to luxury items or upgrading their rental places.

While it’s great to enjoy life and to receive fast gratification for your efforts, it’s important to think about the future too. Buying a home can be a good way to build wealth over time, (and of course to have a secure roof over your head) but investing in other things can be risky. Plus, if house prices keep going up, you might regret not buying one sooner!

Save for Success.

Many would-be homeowners are taking a strategic approach to property ownership. By renting and diligently saving for a larger deposit, they aim to weather market fluctuations and secure a stronger financial position. Some are even considering downsizing or relocating to regional areas for more affordable living and faster savings growth.

While these strategies offer potential benefits like financial security and lower living costs, they also involve trade-offs. Delayed gratification, increased rental expenses, and adapting to a new lifestyle are possible challenges. Ultimately, the decision to rent and save versus buying hinges on individual circumstances, financial goals, and comfort with risk.

Government Assistance Programs Have Got Your Back.

The good news is you don’t have to navigate the property market entirely on your own. The Australian government, along with various state and territory initiatives, offers a helping hand to first-time buyers.

Federal Government Support:

Home Guarantee Scheme (HGS)

This program allows eligible buyers to purchase a property with a deposit as low as 5%. It encompasses three options: First Home Guarantee, Regional First Home Buyer Guarantee (ideal for regional areas), and Family Home Guarantee (for families). You can find more information and eligibility details on the Housing Australia website.

Help to Buy Scheme (certain states only)

This scheme provides financial assistance in the form of equity contributions towards a new or existing home purchase. [Check your state’s specific program details]

State-Based Initiatives:

First Home Owner Grants

Many states offer financial grants to first-time buyers, often with stipulations like purchasing a newly built home. Research the specific program in your state for eligibility and details.

Stamp Duty Concessions

Some states provide first-time buyers with reduced or even waived stamp duty fees, which can be a significant saving. Look into your state’s revenue office website for information on stamp duty concessions. [This will vary by state]

Shared Equity Schemes

Similar to the federal Help to Buy scheme, some states offer shared equity programs to assist with the purchase. Research your state’s housing department website for more details. [This will vary by state]

Remember that eligibility criteria, financial assistance amounts, and program availability can vary widely based on your location, income, and other factors.

To fully understand your options and determine eligibility, consulting with a financial advisor is strongly recommended. By taking advantage of government assistance programs and seeking professional financial advice, you can increase your chances of achieving your dream of homeownership, even in this challenging market.

Your Path to Homeownership Starts Here.

While the property market might seem daunting, there are clear pathways to homeownership. By carefully considering your options, saving strategically, and exploring government assistance, you can bring your dream of owning a home closer to reality.

Remember, every journey is unique, and as a professional buyer’s agent, I would be happy to take that journey with you by tailoring a plan that suits your specific circumstances and goals. With determination and the right support, you can unlock the door to your own home.