This is when it starts to feel real – deciding where you can afford to buy!
Pinpointing where you will buy is one of the key decisions to make as a first home buyer. And with a bit of digging around you could find there’s a surprising number of affordable suburbs to choose from.
Look beyond broad-brush numbers
Key point: Don’t be put off by city-wide median values that can seem beyond your reach. These figures only tell part of the story and home prices can vary widely between suburbs.
Be prepared to cast your net wide
Being flexible on your choice of suburb can open up the number of locations you can afford to buy in. In particular, sacrificing proximity to the city, can give you a lot more bang for your buck.
One in five Australians are choosing to live in our fast-growing outer suburbs, and these locations can offer real opportunities to first buyers.
As a guide, Melbourne’s median house value is $821,000. But if you head out to Kings Park – still within 20 kilometres of the CBD, houses are priced at around $551,000. Go another 10 kilometres out to Rockbank and the median house value is $472,000.
Do you want to tap into free money?
As a first home buyer you may be able to take advantage of a financial helping hand either through stamp duty exemptions and/or the First Home Owner Grant. These benefits can play a role in where you can afford to buy as they can add up to tens of thousands of dollars. That’s valuable cash that can help you over the line with your first home.
The catch is that in a number of states/territories the most generous benefits are available when you buy or build a new home. The good news is that in a number of cities it can be cheaper to build a new place rather than buy an established home. It adds up to even more affordability, plus you get to enjoy a brand new home!
Choosing a house and land package can narrow down your choice of suburbs to those with affordable vacant land. And as a rule, land is cheaper, further out from the city centre.
Are you flexible on the type of first home?
Being open to making your first home an apartment rather than a house could expand the areas where you can afford to buy. That’s because apartments are often cheaper than houses.
Across Brisbane for instance, the median house price is $557,000, far more than median apartment of just $380,000. But within specific suburbs, the price difference between houses and apartments can be significant.
In fact, only 7% of suburbs in Brisbane have median apartment values above $500,000 compared to 37% for houses. So chances are you could be more likely to find a location you can afford if you opt for a unit.
Know what you can afford to pay
Before you begin checking out different suburbs it can help to know how much you can borrow – this can shape a buying budget, which determines what you can comfortably afford to spend on your first home.
Talk to us for a firm idea of your borrowing power. It’s information that can show more clearly where you can afford to buy.
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- Chapter One : Getting started
- Chapter Two : Your Dream Home
- Chapter Three : Money Matters
- Chapter Four : Ways to Purchase
- Chapter Five : Understanding Interest Rates
- Chapter Six : Understanding Home Loans
- Chapter Seven : Lending Sources
- Chapter Eight : Getting Your loan
- Chapter Nine : Choosing a Home
- Chapter Ten : Steps to Settlement