15 February 2020
Author: REIWA President Damian Collins
There’s no denying that it’s a great time to buy in Western Australia. If you’re currently renting but keen to get into property ownership, the current market conditions provide plenty of opportunity for you to secure your first home.
Perth is in a unique position, compared to cities on the East Coast like Sydney and Melbourne, with housing affordability continuing to improve, making home ownership more accessible.
reiwa.com data from the December 2019 quarter showed that a significant number of sales transactions were below $350,000 which indicates an active first home buyer market.
When you combine market conditions with the Morrison Government’s first home buyer deposit scheme, which acts as a guarantor so first home buyers can purchase a home with a deposit of five per cent without mortgage insurance, you are in a good position to get into the market.
Know the market
Once you’ve made the decision to buy, it’s important to do your research. Having a good understanding of how the market is behaving, especially in the areas you are interested in buying in, will work to your advantage.
Learn more about what an area offers you in terms of lifestyle, what properties are typical in the area, what the median price is, and assess the potential for capital growth. reiwa.com is a great resource for those looking to get into the Perth property market for the first time. You can access the latest news, market data and in-depth suburb profiles.
When researching, think beyond your short-term plans. You might live in your first home for many years so consider the fact you might need more room down the track. Another option to consider is to build a house or buy an off-the-plan apartment, which both have stamp duty concessions for first home buyers.
Savings and loans
A savings plan is critical, and you want to have a solid plan in place so you can establish a reasonable deposit. Remember, it’s not just the cost of the house you have to consider. There will also be settlement costs, moving costs, and you may want to set aside some funds to acquire new furniture or renovate or improve the property.
The additional bonus of saving a higher deposit is that you’ll avoid or reduce the amount of Lenders Mortgage Insurance you have to pay which can be a surprisingly high sum. First home buyers also have the option of a Keystart Home Loan, which is a government agency designed to help first home buyers with low deposits get into the market.
The amount you can borrow from a bank or other financial institution will depend on a number of factors like:
- income
- existing debts and financial commitments
- credit history
- loan type
- employment history
- savings
- assets
Find out how much you can borrow.
It helps to be prepared so consider applying for pre-approval of your home loan. This will put you in a much stronger position and you’ll be more aware of your limitations when making an offer.
More information
If you need more help, local real estate agents are a great source of information providing insight into market behaviour and they might have a suitable home for sale.
If you are short on time or don’t know where to start, then a REIWA buyer’s agent can find you the dream home you are looking for. Find a local REIWA agent.
Alternatively, check out our first home buyer guide for the latest tips and information on buying your new home.
