4 steps to help you avoid overpaying for your first home

Home prices continue to climb across Australia. In October, national dwelling

values rose 1.1% – the strongest monthly gain since June 2023.

Several factors are fuelling the uptick in growth. One is the lack of housing supply in many

markets. The expansion of the Australian Government’s 5% Deposit Scheme from 1 October

also saw a surge in first homebuyer activity and added demand to the lower and middle price

points of the market.

The scheme has made it easier for first home buyers to get into the market with a deposit of

just 5% (without paying LMI). However, it’s important to understand the risks involved. If the

property’s value drops, borrowers could get caught in negative equity territory.

That’s why it’s so important to purchase the right property for your needs in the right location,

without overspending. Here are some tips so that you can approach the market with

confidence.

1) Do your research

Thoroughly research the area you’re looking at buying in. Check out the median prices, recent

sales, capital growth trends, access to amenities, planned developments, population growth

and local employment.

These insights will help create a clear picture of the suburb, what you can expect to pay, and

how you can anticipate your property might perform.

Tip: Ask us for a free suburb report to help inform your decision making.

2) Get familiar with the market

It’s extremely rare to find the right property the first time you do an inspection. Usually, it takes

a few goes to get a feel for the market and know what you really want in a home. So, be

prepared to dedicate several weekends to open houses.

You could even check out some auctions to see how they work. It may give you insight into the

kinds of buyers you may be competing with.

Once you do find a property you like, look for any intel around the neighbourhood that could

be used as a negotiating tool. Street noise, perhaps? A dodgy-looking house on the corner?

Anything that affects the appeal of the property is a potential bargaining tool.

3) Have your finance ready to go

A finance broker can explain your borrowing capacity and organise pre-approval on your

finance. Pre-approval is an in-principle estimate of the maximum amount a bank is likely to lend

to you.

Having pre-approval in place helps mitigate the risk of overspending and gives you confidence

during the negotiating or bidding process. It also shows the seller that you mean business and

are actually serious about buying.

4) Walk away if necessary

When you fall in love with a property, it can be hard to walk away if the price is out of reach.

However, it’s important not to let clever marketing tactics like a beautifully staged home trick

you into paying more than you need to.

If the vendor won’t budge on price, you may need to look elsewhere.

Ready to get started?

By doing your research, understanding the market and organising your finance early through

us, you can rest assured you’re not overspending. Whether you’re looking to get in before the

end of the year, or want to discuss your options for next year, I’d be happy to chat through your

purchasing aspirations or get the ball rolling on pre-approval.