Five things you need to know before buying a house.

closeup-shot-person-thinking-buying-selling-house-min
Share Post :
Facebook
Twitter
LinkedIn
WhatsApp

Buying a house is one of the most significant decisions in one’s financial journey. Whether you’re a first-time buyer or an experienced homeowner, the process can be daunting. In Australia, the property market has its own unique challenges and opportunities, so it’s essential to approach it with a well-rounded understanding.

This blog will guide you through the five critical things you need to know before purchasing a house in Australia. 

1. Know the Australian Property Market 

Understanding the current state of the Australian property market is crucial before making any purchasing decisions. The market can vary significantly between cities and even suburbs within the same city. 

Key Statistics 

– As of 2024, the median house price across Australia is $925,000

– Australia experienced an annual property price growth rate of +6.8% overall in the housing market. 

June 2024 House Price Report for Australia’s capital cities 

Capital City Median House Price (AUD) Quarterly Change Annual Change
Sydney 1,520,000 +3.1% +8.4%
Melbourne 1,010,000 +1.2% +5.2%
Brisbane 820,000 +2.7% +7.6%
Adelaide 750,000 +2.4% +9.0%
Perth 720,000 +1.8% +6.3%
Canberra 900,000 +1.5% +3.9%
Hobart 690,000 +2.0% +4.8%
Darwin 650,000 +1.7% +2.7%

Market Trends to Watch: 

Interest rates: The Reserve Bank of Australia (RBA) cash rate influences mortgage rates. Stay informed about rate changes. 

Supply and demand: Areas with high demand and low supply typically see stronger price growth. 

Government policies 

  • First Home Owner Grant (FHOG): A one-time grant available to eligible first-time buyers, varying by state. 
  • Stamp Duty Exemptions/Concessions: Some states offer stamp duty reductions or exemptions for first-time buyers. 
  • First Home Guarantee Scheme (First Home Buyers Guarantee): Enables eligible first-time home buyers to purchase a property with a deposit as low as 5%, without paying Lenders Mortgage Insurance (LMI). 

Understanding these trends will help you make a more informed decision about when and where to buy. 

2. Understand Your Finances and Borrowing Capacity 

Before house hunting, it’s crucial to have a clear picture of your financial situation and borrowing capacity. 

Steps to Assess Your Finances: 

  • Calculate your savings: Aim for a 20% deposit to avoid Lenders Mortgage Insurance. 
  • Check your credit score: A higher score can improve your loan eligibility and interest rates. 
  • Estimate your borrowing capacity: Use online calculators or consult a mortgage broker. 

Key Financial Considerations: 

Loan-to-Value Ratio (LVR): Aim for 80% or less to avoid LMI. 

Interest rates: Compare offers from multiple lenders. 

Loan features: Consider offset accounts, redraw facilities, and fixed vs. variable rates. 

3. Research Locations and Property Types 

Location is crucial in real estate. The right location can offer lifestyle benefits and potential for capital growth. 

Factors to Consider: 

1. Proximity to work, schools, and amenities 

2. Public transport and infrastructure 

3. Future development plans 

4. Crime rates and safety 

Property Types 

  • Houses: Offer land ownership and potential for renovation or extension 
  • Apartments: Often more affordable and lower maintenance 
  • Townhouses: A middle ground between houses and apartments 
Property Type Pros Cons
Houses Land ownership, privacy, potential for expansion Higher maintenance, more expensive
Apartments Often more affordable, have lower maintenance Body corporate fees and less privacy
Townhouses Balance of space and affordability; some outdoor areas May have body corporate fees and less privacy than houses

4. Plan for Additional Costs 

Many first-time buyers focus solely on the purchase price, overlooking additional costs that can add up quickly. 

Common Additional Costs 

Stamp duty: Varies by state and property value 

Legal and conveyancing fees: Typically, $1,000 – $3,000 

Building and pest inspections: Around $300 – $600 

Mortgage registration fee: Varies by state 

Moving costs: Depends on distance and volume 

Breakdown of additional costs when buying a house 

5. Navigate the Legal Process 

Buying a property involves several legal steps. Understanding these can help you navigate the process more confidently. 

Key Legal Steps 

– Contract review: Have a conveyancer or solicitor review the contract of sale. 

– Property searches: Conduct necessary searches to uncover any issues with the property. 

– Cooling-off period: Understand your rights during this period (varies by state). 

– Settlement: The final stage where ownership is transferred. 

Important Documents 

– Contract of Sale (outlines the terms of the property transaction) 

– Vendor’s Statement  

– Building and Pest Inspection Reports 

– Strata Report (for apartments) 

– Property Titles and Zoning Laws 

Always seek professional legal advice to ensure you understand all aspects of the purchase. 

Your Guide to Buying a Home 

Sydney Real Estate Group is a leading real estate agency in Australia, dedicated to providing exceptional services to both buyers and sellers. Our team of experienced professionals offers comprehensive guidance and support throughout the entire property transaction process. 

Whether you’re looking to purchase your dream home or sell your current property, SREG is committed to helping you achieve your goals, providing personalised service and striving to exceed your expectations. 

Ready to make a move? Connect SREG today and let us help you find your perfect property or sell yours for the best price. 

We specialize in a range of innovative and accessible solutions to help you find your way into your first home. With a focus on Shared Equity Schemes, Government Grants, and Essential Workers Eligibility, we are committed to providing you with expert guidance and support every step of the way.

Leave a Reply

Your email address will not be published. Required fields are marked *