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October 14th, 2014 | Media Release
While Perth’s property prices have grown almost out of reach of many first homebuyers in recent years, superior options still stand out for homebuyers who take the time to do their research, says Property Wizard’s Buyer’s Agent, Trevor Dunkley.
Here, Mr. Dunkley shares his top three tips for first homebuyers in Perth.
BUDGET FOR THE FUTURE
Ensuring you know what you can realistically afford is the critical first step, said Mr. Dunkley.
“Even if you qualify for finance for a more expensive property, if that amount is not realistic you could end up in a very stressful situation.
“Going above what you can sensibly afford leaves you exposed to financial shocks, including interest rate rises or a change in your income,” he said.
When considering your budget, remember to account for the full costs of buying a property.
“Homebuyers will often look at the advertised purchase price, and neglect to consider stamp duties, rates or inspection and settlement fees,” Mr. Dunkley said.
SAVE NOW TO SAVE LATER
Mr. Dunkley also said that “saving up the largest deposit possible will save you money in the long term.
“While it may fairly simple to get a loan with a 5 or 10 percent deposit, a 20 percent deposit will help you avoid the cost of mortgage insurance.”
Research from financial comparison site, Mozo, has noted that many young Australian’s would like the option to access their superannuation early to buy a house, which Mr. Dunkley observes has been done before internationally, such as with New Zealand’s KiwiSaver scheme.
“Accessing superannuation for a home deposit could be an effective option to encourage new homebuyers into the market, however there would need to be further research into the impact of this scheme in Australia.
“If this were to come into effect, first homebuyers would need to take careful consideration as to the long term costs of removing contributions from their superannuation, which will impact the returns their funds could make,” he said.
DO YOUR RESEARCH
With more than 50 suburbs surrounding Perth and a median price of $540,000* as of June 2014, finding the right property in the ideal location on a tight budget can be tricky.
“Homebuyers need to arm themselves with quality research to find the right property,” said Mr. Dunkley.
“It’s easy to get caught up in the hype surrounding particular areas, or be drawn in by a deluxe home in a stylish display village, but many of these purchases can disappoint the buyer in the long term if there is no real potential for long term growth.
“First homebuyers should look at their dream property as critically as an investor would, and the right due diligence will help ensure they are paying the right price.
“If you’re not sure, one meeting with a professional could save you from making a mistake that can take years to recover from financially, such as buying in the wrong part of a suburb, or the wrong suburb entirely,” he said.
Once you’ve found the right property, make sure the contract you’re signing will allow you time to properly ensure you’re getting the best deal.
“Inexperienced property buyers tend to gloss over the purchase conditions when they’re convinced they’ve found a great property at a great price, giving the seller the upper hand,” Mr. Dunkley said.
“Taking the time to add a few conditions of your own to the contract can assist you with anticipating costs that may arise down the track.
“For example, a clause requiring the seller to endorse the Seller’s Disclosure Statement, a comprehensive list of warranties and disclosures that the seller makes, ensures you as a buyer can take action if any of these disclosures are incorrect or misleading.”
If you’re prepared to do your research, or engage an expert to search for you, it is always possible to find your ideal first home – no matter where the market is in the cycle.