Expert Advice by Rich Harvey
While the meteoric growth seen in the Sydney property market in the last couple of years has been fantastic for many house hunters, it has also priced a lot of people out of the market. The CoreLogic RP Data monthly indices show that dwellings in the city rose in value by 12.4 per cent over the last year, with a month-end value for December of 820.51 on the index.
This is prohibitively expensive for a lot of younger people looking to get onto the ladder - so if you're a first home buyer, how do you make your way into the market?
Look for the positive pockets
While the CoreLogic RP Data figures paint a grim picture unless you've been saving since you were a little kid, they are not the be-all and end-all of the real estate market. For example, the Domain Group's House Price Report for the December quarter saw unit prices in Brisbane fall by 3.3 per cent over the year. This is due to the high level of apartment construction, according to Domain Senior Economist Andrew Wilson.
As the report shows that Sydney prices are still rising, this could offer a good opportunity for those who are priced out of the Sydney market. I think Brisbane is on the cusp of a really healthy year for growth, and picking up the right property there may end up being very beneficial. The city's houses already rose in price by 6.1 per cent over 2014, and as people look for better value than the Sydney market, demand and prices for all types of property in Brisbane should pick up - seeing those units rise in value once more.
Get the tax imposts out of the way
As Cameron Kusher of CoreLogic RP Data noted in a recent blog, stamp duty is a great impost for first home buyers. As home values rise, the amount of stamp duty that must be paid increases with it. Despite discounts in some states, bodies such as the Real Estate Institute of Queensland have consistently called for a reduction or abolition of the tax.
If this managed to come about, it would be a great victory for first home buyers.
For the meantime, one of the most prudent courses of action is getting expert advice and intimate knowledge of the market. A buyers' agent exists to solely work for you, the buyer, and is an indispensable asset when you search for an affordable first home. Get your finances in order with a pre-approval from a mortgage broker so you know your borrowing limits first as this will help you pin point the right areas to start the search.
Managing Director, propertybuyer
This article was written by Rich Harvey, founder and Managing Director of propertybuyer, Sydney & Australia’s most awarded Buyers Agents. Propertybuyer helps property investors and home buyers search and negotiate the right property at the right price, everytime. For further details please visit www.propertybuyer.com.au or call +61 2 9975 3311 or 1300 655 615.
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.
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