Everything You’ll Need To Consider Before Buying Your First Home

Prospects of homeownership have become increasingly bleak for young Australians in recent years. According to property data recorded by CoreLogic, housing prices are currently rising at their fastest rate in 17 years. Sydney, the country's most expensive capital city, has recorded an annual price growth rate of 18.2%.

Numbers like this are easy to get bogged down in. They can set off concerns about the possibility of having to deal with painful landlords long-term or having to live under the same roof as your parents forever (neither of those circumstances are bad per se, they're just not ideal for everyone).

However, homeownership is possible. It may be tough, but young people are getting their foot into the property market door. Rather than fantasising about randomly stumbling upon a large sum of inheritance, getting practical about it is the best way to approach the whole situation if you're looking to start your purchasing journey.

For some people, homeownership has always been the end goal signifying stability.

"Buying a home wasn’t always a financial goal for me up until the last 5 years," said Sam* on the other hand, a 28-year-old from Sydney who recently purchased their first home.

"When I started saving at 18 I just kept accumulating money but didn’t have a direction as to what I was saving for. It wasn’t until a few years ago I decided to save for a home."

For Celeste*, a 25-year-old-pharmacist from Sydney, it was always front of mind.

"My parents made it clear from early childhood to me and my siblings that we should aspire to buy a home and that rent was basically dead money. I'm lucky that my partner also had similar views. So we purchased an investment property in Sydney's west last year, which was a huge step for us," she said.

"When I was initially saving, I liked my money to be where I could see it, in my bank account. But as I learnt more about the value of investing from my parents, I realised that buying a home was a good way to invest and also enjoy the lifestyle benefits of my savings," said Sam.

"I stayed at home with my parents right up until I bought my apartment at age 28, so I was able to save the majority of my monthly salary, with only food and clothing expenses that I had to pay for."

Celeste also found it challenging to save for a home loan, but felt lucky in that sharing the load with her partner made it easier.

"I was still in my final year of study when we decided that buying was something we wanted to do in the near future. My partner had been working full-time for a while, but we both made conscious efforts to budget, and I picked up another part-time job on top of my internship to help bolster my savings in that time."

It's important to note that financial providers will offer many different home loan options for first home buyers. For example, Suncorp Bank offers a variety of home loans and expert assistance as to which mortgage features will suit a first home buyer best. If you're looking for extra help, speaking with a home loan specialist will also give you a better understanding of the process to approval. It's also important to research grants and schemes available to you, which could also help take the pressure off saving for a loan.

"The biggest challenge was getting my head around the process of getting a loan. I had several calls and in-person meetings with my home lender and asked my parents to take a look over the paperwork. I wasn’t even aware of what an offset account was," added Sam.

Buying a home isn't a matter of just finding a property you like, saving for a loan and bidding. There's a lot of jargon and steps you'll need to navigate to actually make the purchase happen, which can seem overwhelming at first.

"The process was a lot more complicated than I thought it would be. It’s not just looking at real estate websites and seeing apartments that I liked in suburbs that I wanted to stay in — the Hills District, Parramatta and Strathfield/Homebush," said Sam.

"Knowing what questions to ask when you go to viewings was also another huge thing I learnt along the way, like, 'How much is strata?' 'How many square metres is the place?' 'Does it face north?'"

"Speaking to those who'd done it before was really the key factor in helping wrap our heads around the experience. Even though my parents were supportive through the process, their experience buying was different due to the time period, meaning a lot of their advice was outdated," said Celeste.

"Remember, you’ll need to get a solicitor, and they’re not cheap," added Sam.

"They need to have a look over your whole contract, and chances are there will be some back and forth, but it’s worth it to make sure everything is in order. You’ll have insurance to organise, and, I also had to invest in life insurance and a will."

It is a journey, but as long as you've armed yourself with the right info (and have the courage to block out self-comparison from "SOLD" Facebook posts from old high school chums), you're on the right path.