One would expect the housing market would be negatively affected by Australia’s high unemployment rate, population growth, and freeze on immigration. That is not the case, however. In fact, according to global investment management firms like AMP Capital, residential properties in Australia increased by 0.2% in the last month. Because of this, 1 in 4 homes in the country is now worth more than $1 million.
According to AMP Capital, a combination of government support, regulatory easing, inadequate supply concerning current demand, and low-interest rates are holding the prices of residential properties up. Pundits are calling it an inter-generational theft, and class divide as thousands of people in the country aren’t able to purchase their homes, especially first-time buyers.
If you’re a first-time homebuyer, your best options are the following: purchase a land for sale, build your house on a lot, or select a location away from the city, which AMP Capital recommends considering the low risks. Considering all of this, how would you purchase land or a home? This article aims to help first-time homebuyers to get a quick glimpse of the home-buying process in Australia.
Explore Residential Areas
If you’re already set on a location where you’d like to purchase your house, you can move forward to purchasing your home. If not, it’s worth considering and exploring other areas. There are many suburbs across the country that you can choose from.
If exploring areas is not feasible, you can seek the help of real estate agents to help you find the most appropriate property for you. Otherwise, you can check out government-recognized websites such as Domain, Real Estate, and Real Estate View.
Suburbs across the country have houses with varying prices, which is influenced by many factors, but mostly depend on the type of residential property. Try to check the prices of houses in the suburbs on government-recognized websites such as Domain and Australian Property Monitor.
Inspect a Property Before Purchasing It
Ask your real estate agent for a tour of your prospective home. Aside from seeing a property in person, a home tour can help you to initially inspect a house before purchasing or making an offer for it. Check for issues within a house. If you want to be thorough, though, it’s best to hire a property inspector who can check the house. A professional knows what to look for and thus, can be more meticulous in their inspection.
You can cover the home inspection cost and deduct it from the property’s sale price. The cost of the home inspection report will vary depending on what type of inspection was done on a property.
However, if you’re taking a loan to buy a house, your lender will also have the house inspected by a valuer before approving your loan. You can still compare a lender’s valuation with the valuation you can get from an independent valuer. This way, you know you’re getting the true value of your prospective home.
Homes in Australia are primarily sold through private sales and auctions. You can purchase a house from a seller or through a real estate agent in a private sale. A real estate agent will coordinate and negotiate the advertised price with the seller on your behalf.
In an auction, on the other hand, buyers are invited to a public forum, typically outside the property that’s for sale. From there, you bid the property’s price against other buyers.
Take a Loan for a Home Purchase
Most buyers borrow money to purchase their homes. If you’re taking the same route, you have several options. You can take a home loan through major banks, mortgage brokers, building societies, credit unions, and specialist home loan lenders. For first-time home buyers, Australia offers the First Home Owner’s Grant.
Each lender provides different features and conditions. It is, thus, important to understand your options before you commit. Each lender will have different fees and interest rate structures, which could be fixed or variable terms. If you want to find a home loan that’s the right fit for you, consider working with a mortgage broker. They are often paid by home loan lenders with a commission, but they provide helpful information.
Lenders will typically pre-approve your loan, which can help you get information about the pre-approved amount of your loan. This will make it easier for you to look for properties within this amount. However, you will be required to pay a deposit up front, 10% of a home’s value. It would be best if you also had money set aside for the settlement, which is the official date of a property’s handover to its new owners. Settlement is usually scheduled from 30 to 120 days after a house is bought.
Do Your Homework
While it could be challenging to buy a home in Australia today, it would help greatly if you’ll organize your finances before making plans to purchase a property. With your finances organized, you’ll find it easier to move from one step to the next.