HOME > BLOG > Buying and Selling > Not sure where to start as a first home buyer?

Many first home buyers have struggled to get their foot into the property market in the past, and the numbers are continuing to fall.

Many first home buyers have struggled to get their foot into the property market in the past, and the numbers are continuing to fall.

According to RP Data, 6,054 first home buyers were committed to housing finance in August, which is the lowest amount since June 2000. There are a number of factors which may be contributing to this new low with affordability and the changes to first home buyer grants being just a few. 

According to RP Data research director Tim Lawless, ‘Dwelling values rising at a time when average wages aren't rising anywhere near the same pace and affordability constraints are dampening first home buyer demand. This is particularly the case in Sydney and Melbourne where dwelling values have risen substantially.' 

In order to cater for these rising prices, first home buyers could consider looking further out from the CBD area to find suitable properties with good access to amenities and public transport, but are significantly lower in price. 

The First Home Buyer Grant has also had an impact on the number of first home buyers entering the market over the years. When the Australian government boosted the First Home Buyer Grant to $14,000 in 2009, the number of first home buyers who were active in the property market skyrocketed to 18,744 in May 2009 (RP Data). 

However, since then many states have scaled back  the grants being offered and the market has seen first home buyer numbers slowly declining. 

One popular solution for first home buyers to get their foot in the property door is to purchase a property as an investment and either continuing to rent themselves or live at home with parents for longer. For many first time buyers, the suburb they wish to buy in is often too expensive to purchase in, so they buy an investment property in a more affordable area while renting a property closer to an area they want to live. The rent income they receive helps with meeting the repayments on the loan.

This is a great way to get a start in the property market or the beginnings of building your property portfolio, plus when you are ready to purchase your own home to live in, you can use the equity saved in your investment property to contribute to the purchase.

If you are a first home buyer eager to get your foot on the property ladder, give our lending team a call on 13 72 62 or email ask@statecustodians.com.au. Our friendly team can crunch the numbers for you and help work out your options. Once you know how it all stacks up you will be able to develop a plan to help you buy your first home sooner.