Australia’s five best first home buyer locations

 

We’d all love a palatial five bedroom palace in the heart of Sydney, with a spa on the roof, and luckily dreams are free. For most of us, Australian house prices mean that we have to look to more modest locations to get onto the market.

First home buyers in particular have to be creative and search for a property that’s affordable, yet still boasts the features that they want in a home. This may be easier than buying a mansion in Darling Harbour, but it’s no mean feat.

To help make it just a little easier and get you started the right way, here are five of Australia’s best first home buyer locations.

Parramatta's one of Australia's best first home buyer locations. Parramatta's one of Sydney's most promising first home buyer locations. Parramatta’s one of Sydney’s most promising first home buyer locations.

Parramatta, NSW

Just 23 kilometres out of NSW’s main centre you’ll find Parramatta, a fast-growing area that’s often referred to as Sydney’s second CBD. Sydney locals will be similar with Parra, but many may not know that it boasts world heritage attractions, food, drink and nightlife to rival any in Australia – and most importantly, a reasonably affordable property market.

Houses here may be out of reach of Sydney’s first home buyers, with a Residex reported median value of almost $1.2million. However, units are far more affordable, with a median at just over half that number – $613,000. This means half the units in the city will be under that value, which is where the opportunity for first home buyers lies.

We’d all love a palatial five bedroom palace in the heart of Sydney, with a spa on the roof. Luckily dreams are free.

Ashcroft, NSWIf you’re willing to compromise and live in a unit instead of a detached house, Parramatta offers a lifestyle and conveniences, comparable to central Sydney (at a better price).

Apartments aren’t for everyone, and unfortunately, if you’re looking exclusively for a detached home that can make buying your first home extremely difficult here in Sydney. Despite that there’s still pockets of affordability if you know where to look.

Ashcroft, 35 km out of the city centre, is one such place. Your Investment Property data shows that here the average home is valued at just $620,000, a number that may be just within the limits of most first home buyers.

Buying a detached house a short distance from Sydney has long been assumed to be near impossible for first home buyers. Ashcroft is proof that that’s not true.

Where are the best first home buyer locations near Brisbane?Where are the best first home buyer locations near Brisbane?

Springwood, QLD

First home buyers in Australia are very familiar with the idea of sacrificing right now, for future opportunity. Buying your first home in Springwood is one example of when those sacrifices are likely to pay considerable dividends in future. This location may not impress buyers, now but that could be all about to change.

This little town is situated directly in between the Gold Coast and Brisbane, and is slated for considerable development down the track. In fact, the Courier Mail spoke to council members last year, revealing that their was significant interest from developers, as well as comprehensive plans to turn Springwood into a high-tech smart city of the future.

Springwood has big things in its future, so first home buyers should get in while property values are still low.

It’s clear that Springwood has big things in its future, so first home buyers should get in while property values are still low. Residex shows that the median unit value is only $267,000, while houses go for just over $500,000. Prices have been increasing by between 4 and 8 per cent over the last few years – so you better get in quick.

Rocklea, QLD

Rocklea is just south of Brisbane central, offering a safe and closeknit community, and low prices that make is one of the best places to buy your first home in Queensland. In fact, it recently topped CoreLogic RP Data’s list of the most affordable suburbs within 10km of the Brisbane, with a median house value of just $390,000.

At that incredibly low average price buyers may be able to get more than they expect here. In Rocklea, three or even four bedroom homes, with generous sections may even be affordable, if first home buyers act soon.

Alternatively those on a smaller budget could be able to get in sooner than they may have believed possible, by buying here.

Regardless of how affordable Canberra's suburbs may be - you won't get far without a first home buyer loan.Regardless of how affordable Canberra’s suburbs may be – you won’t get far without a first home buyer loan.

Scullin, ACT

Scullin is one of the most tightly held suburbs in Canberra, boasting large section sizes, plenty green space, a safe family-orientated community and proximity to the city. The best part is that property here is incredibly affordable, at price points ideal for first home buyers.

CoreLogic puts the average house value at under $500,000, but it’s possible to find property much cheaper than that. The average home loan value here is under $200,000, which speaks to the affordability of the area.

No matter how affordable the property you’re buying may be, it’s all for nothing if you don’t secure a first home loan. The team here at Mortgageport are here to help you with that, offering access to hundreds of loan products and expert advice – from the day you apply for your loan right through to the day you settle.

Three reasons why you should build your next investment property

In May this year alone, almost 17,000 new dwellings were approved for construction all around Australia, Australia Bureau of Statistics (ABS) data shows. There's a very simple reason for that – building your own home just makes sense – but how about building your next investment property?

Are you ready to build your next investment property?Are you ready to build your next investment property?

1. The ability to build your investment property for profit

Whether you're building your first investment property or your 100th, you should do so with the express intention of maximising your profit. First of all, you have to build for the market.

If you're in a central area, occupied mainly by young professionals, a one or two bedroom home may be perfect . On the other hand, if you're in an area occupied by mainly families, a three or four bedroom home with a lawn is more likely to be in high demand. If you're smart, that ability to build what people in the area want could ensure your investment's success. 

Whether you're building your first investment property or your 100th, you should do so with the express intention of maximising your profit.

You should also consider if you can build more than one dwelling on the property. Doing so will cost you more, but it could vastly increase the property's value and almost double its income earning potential.

2. Savings on your investment property's stamp duty

Building your investment could net you a higher profit, but it could also cost you less. You'll almost certainly pay a smaller stamp duty, because when you build you only pay duty on the land, not the property that you build on it.

To give you an idea of how much this could save you, if you were to buy at the CoreLogic RP Data recorded average capital city vacant land price in NSW you'll pay $7,623. If you were to purchase an established dwelling at the Australian Bureau of Statistics average capital city house price, you'd pay a $25,904 stamp duty in NSW. That's a saving of over $18,000 – a number which could be more or less depending on which state you're in. 

3. Making the most of depreciation

When you build your investment property you can claim the depreciation of the building itself, and the appliances inside it against your tax bill. This reduces your taxable income, and as a result the size of your tax bill at the the end of the financial year.

Building your first investment property could help you build wealth. Building your first investment property could help you build wealth.

This is particularly effective with new properties, as depending on which method of depreciation you use, you could claim the entire cost of most of your appliances in your home in the first few years after building it. Make sure you consult an accountant and a quantity surveyor to make sure your investment's as tax efficient as possible. 

If you you're ready to build, the first thing on your to-do list should be to secure a Construction loan for investment. Here at Mortgageport we specialise in tailoring your loan to you, and guiding you through the entire process of your investment. Get in touch today for the expert advice and finance you need to get get started on the right foot. 

Learn the savviest alternative property investment strategies

Housing is the largest asset class in Australia, worth north of 6.5 trillion, CoreLogic RP Data shows. That's more than double the value of all superannuation funds and more than quadruple that of all Australian listed stocks. 

What's more, an estimated 15.7 per cent of Australians own investment property. For those reasons, it's no surprise that property investment in Australia has become increasingly competitive and costly. To find your way into the market it's sometimes necessary to use alternative property investment strategies and think outside the box. Today, we'll discuss a few alternative investment property strategies that will come in handy. 

Could an alternative investment property strategy be the best way to get into the market?Could an alternative investment property strategy be the best way to get into the market?

Rent your home, buy your Australian investment property

Just because it's the 'done thing' to buy the home you live in before you start investing in property that doesn't mean it's the best option for you. Rentvestment is a slightly unconventional investment strategy that's been gaining in popularity in Australia recently and it could be the perfect way to help hasten your climb up the property ladder.

Melton council area just out of Melbourne is a great place to look thanks to its median house value of under $300,000.

In a nutshell, it refers to renting your primary residence and buying investment properties elsewhere. In areas like Sydney and Melbourne where median home values sit near $1 million this could be particularly productive as it will allow you to rent and live near work, family and friends, where property prices may be out of reach.

You can then buy a property out of the city in fast growing but affordable areas – considering only a property's profit making potential as you search.

CoreLogic's data on last year's most affordable areas suggests that the Melton council area (just out of Melbourne) is a great place to look, thanks to its median house value of under $300,000.

Deagon in Queensland is even cheaper with a median unit value just under $123,644. By looking at more affordable suburbs you'll be able to get onto the market sooner and start building equity faster, without making too many sacrifices. 

Alternative property investment: Buy out of the box

If you come up against challenges when buying investment property in Australia simply approach the problem from a different angle. That means thinking out of the box when you buy and looking at property you may not have considered before. It may be in a different location, or be a different type of property altogether. 

Struggling to make property work for you? Try an unconventional property investment strategy. Struggling to make property work for you? Try an unconventional property investment strategy.

CoreLogic's Best of the Best report suggests that the areas that grow in value aren't always the ones you expect. In fact one of the fastest growing areas in the entire country was Wyee Point: a tiny town almost an hours driving out of Newcastle. It's median property value grew by 31.7 per cent over last year to reach a very affordable $478,560. 

Another suburb that's worth considering is Yayalup: a small area 219 km south of Perth. Over the five years ending September 2016 its median property value grew by a whopping 144.4 per cent. Capital gains aren't everything, but these suburbs prove that investment in unconventional locations can reap massive rewards.

Get creative with your finances

The latest data from the Australian Bureau of Statistics shows that property investors hold $12.8billion in fixed rate home loans. You can be sure that a great deal of those home loans weren't as carefully considered and personally tailored as they could have been (after all it can be fairly straight forward to pick a standardised investment loan off the shelf at your bank).

Property investment in Australia might be easier if you approach it creatively. Property investment in Australia might be easier if you approach it creatively.

It may be quick and easy but it could also cost you serious money if your loan isn't perfectly suited to you. That's why it's always best to carry your creative approach to finding and buying property through to arranging and securing finance.

By going with a mortgage broker you'll have access to the products of dozens of lenders, as well as professional advice to help you customise your loan to your situation. These extra features may include the following useful additions and more:

  • Interest only repayments.
  • An offset account. 
  • Custom repayment timing and frequency.
  • The ability to access equity. 
  • Loan portability

If you're considering adopting an unconventional property investment strategy, then your first step should be to organise suitable finance. For a personalised experience and the advice of experienced experts go with Mortgageport.

Unlike some banks and other large lenders we take the time to understand you and tailor an investment home loan so that it's perfectly suited to your goals and your strategy – whatever they may be. Get in touch today to get the ball rolling with your property investment aspirations. 

Self employed home loan challenges and how to overcome them

Being self employed can be brilliant – you're your own boss, you set your own hours and decide how you want to work each day. However, every self starter will know that there are plenty challenges involved that can take some getting used to. 

Apart from overcoming the temptation to constantly take four day weekends, securing a home loan when self employed may be one of the trickiest. Here we look at why that is and what you can do about it now. 

Securing a home loan when you're self employed is possible with the right advice. Securing a home loan when you're self employed is possible with the right advice.

Self employed home loan challenges

When you're self employed, you may not have the income and employment documentation that most nine to five Australians do. Banks usually require these documents when approving a home loan, which can make things difficult.

A recent survey of 1,000 self employed Australians with home loans by Hashching found that this often leads to them getting a bad deal and paying 1, 2 or even 3 per cent more interest than they need to. 

Luckily buying a home when you're self employed (and not being ripped off on your home loan) is very much possible.

Luckily buying a home when you're self employed (and not being ripped off on your home loan) is very much possible – you just need the right advice and strategy. 

The essentials: Buying a home when self employed

Most lenders aren't risk takers. And unfortunately since you may not have proof of a guaranteed pay cheque, you present something of a repayment risk in their minds.

For that reason they may try and charge you more in interest – which is one of the most frustrating self employed home loan challenges.

Having a professional negotiator and mortgage expert by your side from the team here at Mortgageport should be your first step. We deal directly with dozens of lenders, we know how they work and we know how to find the most suitable home loan for you – without the sky-high interest rates.

Don't let being self employed stop you from buying a home. Don't let being self employed stop you from buying a home.

Next you need to get your affairs in order. You'll usually need at least the following:

  • A business activity statement for the last 12 months, verified by the Australian Taxation Office. 
  • You may be asked for statements showing your personal transactions over a period (usually six to 12 months).
  • The last two years of your company and personal tax returns.
  • Documentation proving how long you've had your ABN and GST registration.
  • A 20 per cent deposit (you may have to pay lender's mortgage insurance if you have under a 40 per cent deposit).

Once you've got those documents in order you're good to go. If you need any help preparing, get in touch with the team here at Mortgageport – we're happy to talk you through everything.

From there we'll work with you to understand your business and your needs. Using that understanding, we'll personally tailor a loan to suit you to make sure that it suits your needs to a tee. 

First home loans: Challenges involved and easy solutions

How can you overcome an unaffordable market and secure your first home loan without doing anything drastic like quitting avocado? The answer is simple (sort of). There's a range of challenges inherent in buying that first property and identifying and overcoming them is the way forward.

We've had a look at a few common difficulties you may encounter and suggested simple solutions to make your life just a little easier.

First home buyers face countless challenges: how can we overcome them?First home buyers face countless challenges: how can we overcome them?

Accumulating a deposit

A recent survey by First Home Buyers Australia (FHBA) found that the 85 per cent of people consider the whopping size of a deposit and unaffordable property the biggest of all first home buyer challenges. The average size of an Australian's first home loan is $318,300 and that means that the average deposit is just under $80,000, according to FHBA.

There's no easy way to solve the problem of the gigantic deposit, but by using one or more of these strategies you may be able to make it work:

  • Compromise on what you expect from your first home (location, size, appearance etc)
  • Get help from your parents or buy with a friend
  • Invest your your money while saving for a deposit
  • Try rentvesting or other alternative strategies.

Lenders prefer that your debt repayments make up less than 35 per cent of your income per month.

Credit checks and income level

When you meet a potential flatmate you want to be sure that they'll be able to pay rent. Perhaps you'll do a little snooping under the guise of making conversation: what do you do for a living, where did you live before here? 

Lenders do something similar when you apply for a home loan to make sure you're able to pay it back, which can create difficulties for first homebuyers.

They'll check your credit score – a past record of all debt and they'll require proof of income. For that reason if you're dreaming of home ownership make sure you don't have any bad debt and always pay on or before the due date.

Secondly you'll want to consider your ability to service a loan. Generally lenders prefer that your debt repayments make up less than 35 per cent of your income per month – if the home you want would put you above that number it may be worth adjusting your strategy.

There's plenty of challenges for first home buyers, but securing a home loan may be the toughest. There's plenty of challenges for first home buyers, but securing a home loan may be the toughest.

Finding a loan that makes life easier

In the aforementioned FHBA survey, when asked which service was the most useful when buying their first home 38 per cent of the respondents said mortgage brokers (with second place going to real estate agents at only 25 per cent).

For help navigating the difficulties of securing a home loan, and to make sure you find a loan that makes life easier – get in touch with the team at Mortgageport today. We know buying your first home can be hard and we're here to make it easier.

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