The bad news for first home buyers keeps coming with the number of houses being sold for less than $400,000 nationwide continuing to fall in the past year.
A study released last week by CoreLogic showed that only 33.1% of all houses and 40.6% of all units sold, transacted at a price point below $400,000. This is a record low for housing and highlights the future issues that Australia faces in providing low-cost housing to those in need and entry level properties for young Australians.
For many, regional areas may be the last bastion of affordability with houses and units outside capital cities twice as likely to be sold for less than $400,000. While this is not a long term solution to housing affordability, for those who can find work in Australia’s regional hubs the chances of finding an affordable home are much higher.
With the study highlighting a 10-year decline in houses selling for under $400,000 it seems unlikely that the trend will reverse any time soon.
Tips to make buying your first property more affordable:
- First home buyers should take advantage of government grants offered. While they come with many terms and conditions, it is worth taking advantage of this free leg up to help you into your first home. Details can be found here.
- While it may not be your dream location, living out of a capital city will significantly lower your housing costs. The reality is that very few people are able to live where they want with their first property so looking at it as a way into the property market, with a potential to move closer to a capital later, could be a useful perspective.
- Living with your family for longer and saving up a large deposit may mean that you can’t get into a home of your own as soon as you like but it does come with benefits. Having a 20 per cent or more deposit will mean that lender’s mortgage insurance is waived and your monthly repayments will be lower. It may not be ideal, but if this option is available to you it will certainly give you a long term advantage.