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Is it the right time for you to buy a home?

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  • 17 August 2017

Is it the right time for you to buy a home?

It is the quintessential great Australian dream to own your own home. Many Australians also choose to invest in property, with a view to creating a healthy nest egg for themselves and their families. When considering buying a new home, you might be wondering when is the best time to do so. Knowing if it’s the right time to buy depends on a number of factors. Here, we take a look at a few home-buyer scenarios, in order to help you decide if the time is right for you.

You’re a first home buyer

Perhaps you’ve been working in a stable job with a good income for a number of years, and are considering getting out of the rental market. You may be planning on starting a family, and hoping to find a home of your own to begin that journey. Whatever your age and circumstance, the prospect of purchasing your very first home is an exciting one. If you’ve never purchased a property before and are wondering how to go about it, here are some facts you might like to consider:

  • Have you saved a sufficient deposit, or do you need help from family?
  • What is your financial situation? Is your income secure? What about that of your partner?
  • Are you planning on starting a family, or expecting any other change in circumstance which may affect your financial situation?
  • Have you considered the added expenses involved with purchasing a property (such as legal and conveyancing fees, LMI, and stamp duty, where applicable?)

The good news is that many state governments across Australia are supporting first home buyers with reduced fees, stamp duty waivers, and restrictions on foreign investors. In Queensland, for example, first home buyers are exempt from stamp duty on homes up to $550,000. Whereas in New South Wales, the stamp-duty threshold has been raised to $650,000 and concessions are afforded for homes between $650,000 and $800,000. Furthermore, New South Wales has also abolished the stamp duty on LMI (lenders mortgage insurance) for first home buyers. Each of these measures is designed to make it easier for Australians to realise the dream of owning their first home, and may help you to make it a reality. You may even be eligible for a first home buyers’ grant, if you are purchasing a brand new property. If your financial situation is secure, and you are in a position to make a deposit on a purchase (with family assistance or with your own savings), now is a great time to start looking for a property of your own.

You’re hoping to upgrade the family home

Perhaps you’ve got a growing family, and your current family home is bursting at the seams? Alternatively, you may be considering upgrading to a home which better suits your lifestyle, as you’re now in a more financially robust situation. The reasons for upgrading a home are many and varied. While you’ve lived in your family home for a number of years, and have grown to love its quirks and foibles, you may be asking yourself if now is the right time to move on into something more fitting. Factors to consider, which will help you to make your decision are:

  • Has the size of your family outgrown your home (or is it likely to?)
  • Does your home’s location make work, family or school commitments a challenge?
  • Are you now in a better financial position to afford a larger home, or a home in a more suitable neighbourhood?
  • Have you achieved a level of equity in your home which would make upgrading that much easier?
  • Do you wish to turn your current home into an investment property, and start making a rental income?
  • Is the area you wish to buy in particularly affordable at the moment?
  • Would upgrading to a new home be more affordable (and less stressful) than making repairs or upgrades to your current home?
  • Are you hoping to purchase your ‘forever home’, now that you’re in a position to do so?

Unlike your first home purchase, which may have been modest and befitting your needs years ago, you’re now established in your current home and have built up that all-important equity. You may find that your equity gives you a head-start on the mortgage of your new property, or that it will provide a nice rental income, if you are hoping to branch into a property portfolio. If your needs as a family have outgrown the current family home, now might be the time to reap the rewards of your first home purchase and upgrade to an abode which better fits your lifestyle and your family today.

You want to downsize

Most people assume that there is only one reason to downsize a home: the kids have moved out. While this is an important motivation for many home owners, there are a handful of other very common reasons for downsizing, including:

  • Living closer to the city, or your preferred suburb
  • Lower maintenance costs
  • Making a profit on your larger home, and saving or investing the proceeds

Whatever your motivations for downsizing, there are a number of benefits to doing so. The key things to keep in mind when you’re considering downsizing are:

  • Is the cost and time required for maintenance on your current home prohibitive?
  • Are you now able to move closer to your desired city or into your preferred neighbourhood?
  • Alternatively, now that schools or work are no longer a factor, are you hoping to move into a more affordable neighbourhood?
  • Does the equity in your current home mean that you’ll be mortgage-free, have a much lower mortgage, or even make a profit, once you downsize?

If you’re considering purchasing a home—whether you’re new to the market or are ready to trade the family home in for something more suitable—it is important to consider your needs and those of your family, as well as your financial situation. Once you’ve decided that a new home is what you’re after, some sound financial advice is the next step in making it a reality. Next, of course, is to get in touch with one of our team, and let us help you to find the perfect property for you and your family.