After a nationwide correction in 2019, the Australian property market is once again on the up and up. And while that’s good news for owner-occupiers and investors, it means first home buyers need to do their research and find the perfect opportunity to get onto the property ladder.
The good news is that you can increase your chances of buying your dream home by saving as much as possible for your deposit. Here are five top money-saving tips to help you do just that!
1. Sell What You no Longer Need
It’s difficult to fathom when you’re thinking about spending hundreds of thousands of dollars on your first home, but the old adage of ‘every cent counts’ really does ring true. So rather than look at the big picture of how much you’ll need for your deposit, instead focus on building up what savings you have by getting rid of unnecessary clutter around your home.
Do you really need that old laptop that’s collecting dust? What about the dining table that’s rarely used? Spend a day or a weekend poring over your possessions and separate them into three categories: used every day, used infrequently, and used rarely (if ever). Jump on eBay, Gumtree or Facebook Marketplace and get rid of the rarely-used items and you might be surprised by how much you can contribute to your first-home savings.
2. Decrease Your Current Rent
This may not be possible for everyone, but just think how much you could save if you moved out of your current $400-per-week rental and into something much cheaper? Stashing away an extra $100 – or more – every week can really add up over the long term, especially if you deposit that money into a high interest savings account.
The alternative is to take advantage of family assistance. Maybe your parents have room for you to move back in with them for a few months? Living rent-free – or paying well under market rental rates – could see you significantly increase your first home deposit.
3. Take Advantage of Government Schemes
Australians have a lot of avenues to help them get their first home. You just have to look at the range of schemes and grants currently on offer.
For first home buyers, your eligibility will depend on a number of factors such as the cost of the home you want to buy, your deposit amount and where you intend to purchase the property, but some of the schemes that could help you get into the market include:
- First Home Owner Grant: Each grant differs according to your state or territory, but the goal is to help Australians purchase their first home with the support of a one-off government grant.
- First Home Loan Deposit Scheme: A new government scheme introduced at the beginning of 2020, the FHLDS will help up to 20,000 new buyers purchase a home with a deposit as low as 5%. Places are limited and you must go through one of the approved lenders to apply.
- First Home Super Saver Scheme: This scheme allows Australians to contribute savings directly into their super that can be used to fund the purchase of their first home. Under the FHSS scheme, individuals can have up to $30,000 released, or $60,000 as a couple, towards their first home.
4. Look Outside Established Suburbs
First home buyers who’ve spent years as renters in popular suburbs may be inclined to look in their nearest proximity for the ideal home. The problem is that the median price for houses and units in major cities – especially inner-city areas – is usually beyond the means of first home buyers.
Rather than locking yourself into a select few suburbs that you’re familiar with, look further afield. There are plenty of communities that are still relatively close to the city, or have great public transport options, but aren’t burdened by expensive prices and high-density issues like excessive noise and traffic.
Buying in a master-planned community could be the best outcome, and your current deposit is likely to go a lot further here than in inner-city suburbs that are highly competitive. There are plenty of exceptional communities that welcome first home buyers, such as Harmony on the Sunshine Coast, Brentwood Forest near Brisbane, Waterford in the Hunter Region, and Savana and Bloomdale in Victoria.
5. Take a ‘Pay Cut’ Straight Into Your Savings
This tip is easier said than done, but it’s guaranteed to help boost your deposit if you can stick to it. Rather than come up with an intangible figure that you promise yourself you will set aside every month, take the initiative and cut out a portion of your pay packet every time it arrives. It doesn’t have to be much, but sending money directly into a different savings account means you won’t be tempted to spend it while it’s just sitting in your everyday fund.
Even better, set up an automated transfer on payday so you won’t even see it hit your account – it’ll go directly into your first-home saver and start collecting interest straight away.
At AVID, we create places where people love to belong. To find out more about our developments in New South Wales, Victoria and Queensland and how you can invest in the home of your dreams, contact us today.