A Survival Guide To Buying Your First Home In Sydney

I talk to a lot of despondent first home buyers in Sydney’s East, worried they’ll never get onto the property market in such a competitive market. But it is possible. Armed with some insider knowledge, you can get ahead of the property-seeking pack.

Here are my tips.

Get out your calculator

What you can afford will depend on your budget. So start there and work out how much you can borrow and the repayments you’ll be able to afford. Ideally, your deposit will be 20% of the purchase price. This way, your loan-to-value ratio (LVR) will be lower. Also factor in stamp duty, legal fees, inspection reports and any other costs. It’s worth having a healthy savings account before you apply for a home loan. Check out the moneysmart.gov.au mortgage calculator.

Do your homework

Once you work out what you can afford you need to establish the type of home you want to buy. What are your property must-haves and what will you be happy to compromise on? Identify the areas that have properties in your price range, and talk to a property expert in your target location. Don’t discount a suburb just because it’s not number-one on your list. Suburbs a little further afield from where you’re looking might be better value for money.

Bigger is not always better

If you’ve always dreamt of living beachside in Bondi, it might still be possible, if you opt for an apartment. Not only are they more affordable, there are more of them – there’s a wealth of new property developments in Sydney. A smaller home or unit could be your ticket to a brand-new home in a prime area. If a bigger home is your priority, consider suburbs such as Coogee or Maroubra – slightly cheaper, but still boasting nice beaches and great lifestyle.

Get to know your local agents

It’s an open secret that not all properties are advertised. Sellers sometimes want to fly under the radar for personal or financial reasons. Get to know your local real estate agent, tell them what you’re after, and they may be able to let you know about off-market or pre market sales when they arise, which puts you ahead of the competition.

The early-bird catches the cash

If you’re eligible for a First Home Owner Grant, get in nice and early – in fact, you should apply the same time you apply for your home loan. If you lodge your grant application through your lender, it will be processed faster than if you send it directly to your state or territory revenue office.

Consider an investment property

This is becoming an increasingly popular lifestyle option for city workers who are keen to get a foot on the property ladder, but who want to live in a suburb – such as Bondi or Queens Park – that they can’t afford to buy in. A good option is to purchase an investment property in a reliable rental hotspot while renting in a suburb closer to the heart of the city. In a few years you could use the investment to leverage a move closer to where you want to be.

Things are changing for first home buyers

In this year’s Federal Budget, the government introduced a First Home Super Saver Scheme which came into effect on 1 July. Home savers can ask their employers to deposit money from their pre-tax income into their super account, where it will be taxed at 15% instead of the usual marginal tax rates. Plus, first-home buyers no longer pay stamp duty for purchases up to $650,000, and discounts apply for those spending up to $800,000.

So beyond the hard slog of saving that deposit, do your research, enlist the help of a property expert – and you could get a foot in your own front door very soon.