Strategy the key for first home buyer success 

As seen in The West Real Estate

Buying your first home is an exciting time, with the chance to live in your own place, the satisfaction of saying goodbye to rent, and the thrill of achieving the dream of home ownership.

In the Perth property market this Spring, homes are selling quickly, with strong price growth reflecting the high level of activity. While the market is moving fast, being prepared and informed can turn this busy period into a rewarding purchase and the chance to enjoy the benefits of home ownership.

REIWA President Suzanne Brown said doing your homework and flexibility is the key to achieving your home ownership dream.

“Taking the first step on the property ladder at any time in the property cycle can be stressful, and fast sale times at the moment mean you need to be well prepared to secure your new home,” she said.

“Buyers shouldn’t be deterred. Being well informed, putting together a buying strategy that reflects your budget and preferences, and working with REIWA agents to know what is available in an area, are the keys to success. 

“People just like you are securing homes in this market. The key is being ready and able to put in an offer when a property that meets your criteria hits the market.” 

Start your search with reiwa.com and get your finances in order 

A good first step is to visit reiwa.com, with property listings for sale and valuable tools including suburb profiles, price comparisons and stamp duty calculators (including first home buyer concessions). The Weekly Snapshot provides the latest sales data, updated early each week on the Insights page. 

“I think sometimes first home buyers can be overwhelmed and not know where to start, especially when there are major legislative changes such as the First Home Guarantee all over the media,” Ms Brown said. 

“Really the first step in the process to buying property, whether first home buyer or any other buyer segment, is to look at your budget, your deposit, your capacity to service a loan and associated costs such as stamp duty, moving fees, pest and building inspections and lenders fees and charges,” she said. 

“Once that is done, go to your lender and get a written pre-approval for any money you may be borrowing to purchase the home. Include a small buffer for any unexpected costs, or repairs that may be needed. 

“Pre-approval of borrowed funds is crucial: it gives you both piece of mind when searching and provides certainty for you and the seller. When you are ready to make an offer, pre-approval shows the selling agent you are serious and ready to buy.” 

Explore the available concessions 

For first home buyers, this is the stage where you should look carefully at all the concessions and first home buyer schemes available. 

“This can directly influence where you look for a property, the type of property and the price level you begin searching at,” Ms Brown said.

“For example, the WA Government’s first home buyer stamp duty exemption threshold cuts out for established homes at a purchase price of $500,000, with the concession reduced until $750,000, and with no concession after that price point,” she said.

“However, if you purchase before construction in some new multi-residential strata developments, the WA Government’s off-the-plan duty concession scheme may mean no stamp duty is payable up to $750,000. That’s a saving of around $30,000.

“Another scheme is the WA first home owner grant, which grants $10,000 to eligible first home buyers choosing to build a new home. 

“Each of these schemes may influence where you concentrate your search, with most new home and land packages available in Perth’s newer, outer suburbs, or you may choose to concentrate on established areas with off the plan developments on offer.

“I think some flexibility in the type of property and suburbs you consider will help all first home buyers in the current market.”

Stay open-minded about location and property type 

Once you have your finances organised and are ready to start looking at areas and properties, don’t be put off by the median house price. 

At the moment, the median house price in Perth is around $810,000.  

“It is important to remember that the median is the middle and 50 per cent of sales will be below this price. There will still be affordable options to be found in many suburbs; it may just take time and patience to find them in some areas,” Ms Brown said. 

“If your preferred suburb is definitely out of your price range, look at neighbouring areas, that may have similar communities, transport and shopping hubs, but be more affordable.

At this stage of your property search you need to decide what is most important for you in finding a new property.

“First home buyers have different needs and wants and you must concentrate your search on what gives you your greatest lifestyle match at a price point.

“If you want to live close to the city, in walkable neighbourhoods at price point at or below the Perth median, you are probably best to concentrate your search on units and apartments in  inner suburbs: for example Bayswater, with a median two bedroom unit price of $529,000, or Victoria Park with a two bedroom median price of $475,000.

“If you want a house in an established suburb, there are suburbs such as Morley, Nollamara and Balcatta, Rivervale and Willagee that still have small established homes close to or below the Perth median price.

“If you want a new house, and a bigger floorplan on a smaller block, you are a good candidate for a house and land package in a growth corridor. These tend to be further from the city, but have good options at or below the median house price.”

Ms Brown said the best approach was to stay positive.

“Remember there are always buyers and there are always sellers. The market has highs and lows, but there are always properties to be had. Even if you miss out on one or two properties, remember there will always be another opportunity and stay positive.”