- 28 July, 2017
- First home buyers, First time home owner
This buyer is currently renting, loves their lifestyle and doesn’t want to relocate from the area where they live. However, rentvestors can’t afford to buy in this area. Rather than disrupt their current lifestyle these buyers purchase a property in a more affordable part of the city or country, and rent that property out while they remain as tenants in their current location.
Younger buyers have looked to overcome the affordability challenge by splitting and sharing the cost involved in purchasing a property. They have done this by teaming up with a family member, friend or business partner in order to buy a larger property to co-inhabit or as an investment. The major decision here is how to structure the ownership arrangement.
Mr & Mrs fix it
Young families have looked to get into a larger house in their preferred area by purchasing an older smaller home which usually sits at the bottom of the price scale for the area. Generally, these properties are in need of major renovation; however, they allow buyers to add rooms and levels as their families grow.
Build ‘em up
Another more affordable way to get into a new house is for young buyers to move out of their local area and into a newly built suburb. This has seen demand for house and land packages in new subdivisions rise considerably over the past few years.
Buy now pay later: Purchasing off the plan
Purchasing “off the plan” allows a buyer to put down a deposit now and not have to deal with the mortgage repayments until construction is complete. This has been popular with the under 30s as it allows them to keep saving or maintain their lifestyle in the short term until they move into their new property.
Thanks Mum & Dad: Using parents’ equity
Parents have ridden the property cycle over the past few decades providing many with a hefty equity uplift or outright ownership of their homes. This has in turn allowed them to use their financial position to go guarantor on their children’s mortgage or stump up some cash to help out with the deposit. First home buyers are increasingly turning to their parents for help in order to get into the property market.