FOR those dreaming of owning their first home, confirmation by the Reserve Bank last week that rates will remain on hold is welcome news.
Statistics showing a drop in the proportion of first home buyers in the housing market in recent years may have led some to believe that dream was out of reach.
But while there are housing affordability concerns, first home buyers need not abandon hope.
Interest rates are now at record lows, making it an excellent time to obtain finance, and lock in a competitive loan.
There’s also the option of paying off a home loan more quickly while rates are low.
And there are still plenty of affordable properties out there – if you know where to look.
The key is doing your research.
Decide on your preferred areas and research property prices for the kind of home you hope to buy.
Find those properties on the internet, then follow up and find out what they actually sell for.
Get to know the local agents and talk to them about what you can afford and what is available.
Make a list of your priorities – all the things you want from your home and location, noting those which are musts and which you would be willing to compromise on if you had to.
Check the prices of all the houses you view and note the differences between them.
While local factors such as location and the area’s infrastructure – including highways and local roads – and the quality of the home, all impact on how much a house sells for, median prices are a useful comparative tool and a good starting point.
These median prices – that is, the midpoint of the sales in each area – are available free at reiv.com.au
If you discover your preferred area or areas are beyond your reach don’t despair.
Consider your options: can family members help you raise a larger deposit? Can tighter budgeting mean you can afford to pay a little more?
And hold on to your dream – don’t be deterred by the publicity. After all, by searching your preferred area and keeping an eye on the market, you’re more likely to find the best home to fit your budget in 2015.
– Enzo Raimondo is the CEO of the Real Estate Institute of Victoria.