15th September 2017 / Harley Toyle: Tips to get into Melbourne’s property market

Tips to get into Melbourne's property market

It's no secret that the Melbourne property market is going from strength to strength. Median house prices are on the up, and affordability is…not. Particularly if you're looking for property in Melbourne's most sought-after suburbs.

If Melbourne's five year property forecast is anything to go by, there's no certainty that the market is going to weaken anytime soon. So, how do Melbourne's eager first-home buyers get into the market without moving to Timbuktu?

Other than being wealthy, here's a few tips to get you into a fast-moving market (hint, planning is key!):

Take note of your spending, and adjust where you can

First thing's first; make a list of what you're already spending your money on. Every time you spend, write it down—and don't forget those morning coffees and smaller spends as they all add up!

Then decide, what is a necessity? What could you cut down on? This way you can figure out how much you need to live comfortably, and how much you could afford to pay a week to the dreaded "M" word… mortgage! Budget, budget, budget until it comes time to sign the papers. Remember that the loan isn't going to disappear for a long time, so you should still be able to afford doing the things you love!

Borrow the least amount you can

The more you have saved, the less you have to borrow and the less interest you will have to pay. Although the upfront cost will be 'more', running costs will be easier to manage.

Understand the costs involved

Conveyancing, owners corp., builder's insurance, content insurance, utilities (such as gas, water and electricity) and council rates. This will allow for a much more transparent budget, and you know upfront whether you need to lower your search bracket to accommodate for the costs involved.

"Once you've saved that deposit, the next step is to chat to your bank or, better yet, a reputable broker to establish your borrowing power – this means how much you can afford to spend on a home in line with all of your other living expenses," advised Property Consultant, Harley Toyle.

Figure out your exact price bracket

After the above steps and estimating your interest rate, you will know exactly how much you can afford. Don't assume 'a little more will be fine', as once you have the loan, you NEED to be able to pay it.

Research, research, research

"Shortlist a handful of suburbs you'd love to buy into. These could be area you enjoy visiting, that are close to work or maybe even close to where you grew up," continued Harley.

After you have narrowed down a list of potential suburbs, investigate the type of properties available and the price range. Do they match up with your requirements? If not, try searching a suburb out!

"In your favourite suburb you may only be able to afford an apartment, where as you might be able to secure something larger in a suburb you've only ever driven through to get to work," said Harley.

Finally…

Buying your first home is not something that will happen overnight! You may even have all your finances sorted, but in a competitive market, rarely will your first offer on a home be your final offer. You also need to find a home that you will be happy in.

"When thinking of things to compromise on or sacrifice, it's important to understand what you value, not what others value. How important is it that you're close to public transport, local cafes, schools or parks? Is a garage important to you, or do you ride a bike? Having a good idea of your must-haves, want-to-haves and love-to-haves will help you recognise when the right home comes up, and give you the confidence to secure it," Harley explained.

Good luck, and don't forget to share your favourite tips with us!