Avoiding Costly Mistakes: What to Prioritise in Your Property Search
In This Week’s How's The Market | Edition 60
Avoiding Costly Mistakes: What to Prioritize in Your Property Search
The Ultimate Wow Factor
How A 19 Year Old Purchased Her First Home Without Money From Parents
Avoiding Costly Mistakes: What to Prioritize in Your Property Search
In today's real estate landscape, buyers often find themselves in a challenging predicament – the need to compromise on their property wish list due to limited options. However, it is critical not to make certain trade-offs that could lead to future buyer's remorse.
With housing demand up due to net overseas migration and the rental crisis and supply dwindling due to low supply of new builds, the pressure to secure a property swiftly can prompt buyers to make hasty decisions that might haunt them later. In this climate, it's crucial to strike a balance between flexibility and making informed choices to ensure a satisfying and financially prudent investment.
Reduced Choices and the Impact on Decision-Making
The supply-demand imbalance is evident in the figures: new property listings in Australia dropped by 26% in May compared to the previous year, and a significant 13.1% below the five-year average, according to CoreLogic data. This scarcity has resulted in buyers having fewer options, leading them to potentially compromise on crucial factors.
When stock is low and choices are fewer, it is easy to become impatient and make rash decisions, however, there are a few factors that I encourage you to never compromise on.
Non-Negotiables: What to Prioritize
Budget Integrity: The 2022 Finder First Home Buyer Report found that only a disturbing 43% of first home buyers in 2022 purchased at the budget they initially set out. Whilst 20% purchased below budget, 37% went over budget, from a range of $5000 to more than $150,000. This is the easiest way to feel buyers remorse if your financial health becomes unstable and you struggle to make ends meet.
Property Location: While market conditions might tempt buyers to compromise on location, this is a facet that demands careful consideration. If you cannot afford your dream property in the suburb that you want to live in, consider opting for a smaller property, or from a house to a unit, or from a unit to an apartment (though read our previous article titled Are Apartments A Good First Purchase First). This is often better than getting a worse locations with a similar property. Like on a massive main road, near a school or close to high tension power lines, as this can affect capital growth and your resell potential.
Amenities and Infrastructure: Prioritise areas with sound infrastructure, proximity to social hubs, and potential for future growth. Exploring adjacent suburbs that offer similar amenities could be a practical alternative.
Property Size and Layout: Carefully assess your actual space needs. Buying a property is a long term purchase so try to consider potential circumstances more than 12 months out. Do you really need two home offices? Do you really need 4 bedrooms as a young couple? Will this be the forever home or is this more likely to be a stepping stone?
Property Condition: Never compromise on getting a building and pest inspection or properly assessing the structural condition of a property prior to purchase. It doesn’t matter if the home is brand new or if it’s 60 years old. The biggest mistake you can make is not checking.
Due Diligence: When stock is low and demand is high, properties can move very quickly. Whilst it may not be easy for first home buyers to understand the minuta of due diligence and what to look at, it’s crucial that you don’t skip over looking at as many elements as possible because you are rushing to keep up with other offers. Things like getting the contract reviewed prior to making an unconditional offer, looking at the easements, overlays, position attributes and property attributes. Whilst it may not be important for you, for example, if a property doesn’t have parking, this could heavily impact it’s resale later down the track.
Smart Choices Lead to Lasting Satisfaction
In the midst of a heated real estate market, finding a balance between compromise and informed decision-making is paramount. It's essential to prioritize factors that are non-negotiable and align with your long-term goals. By avoiding pitfalls like stretching your budget too thin, compromising on location, or overlooking essential due diligence, you'll lay the foundation for a property purchase that brings not just immediate satisfaction, but also long-term peace of mind.
What The Agents Are Saying
Stock is coming back!
Agents are, for the first time this year, confident that more stock is coming.
Inner city agents are less confident, as still, it appears a lot of the properties for sale are investment properties, whereas outer suburb agents are saying things all round are picking up with more investment properties and owner-occupied properties coming up for sale in the coming months.
The Wow Factor!
54 Fellows Street, Kew, Vic 3101
One of the most impressive houses I’ve seen.
Do yourself a favour and look through the photos of this architectural bat-cave-esque design.
Some of the multiple Wow Factors include:
Enormous high ceilings and open voids
Curved benches and walls
Spiral stairs spanning 4 stories
Huge wine tasting room/cellar
Gold-class level cinema that looks into a built in pool!!!
Price Guide: $11,000,000 - $12,000,000
In The Media
19 Year-old reveals how she got on the property ladder, despite builder going bust
19 year old property manager Zelta Medenis started saving for her first home at just 13 years old. Working at a cafe after school from 13 to 17 and then as a property manager she saved up enough to put a deposit on a yet to be built off the plan apartment.
Potentially lucky for her in the end the builder of the apartments went bust, she then (luckily) received her deposit back and went on to buy her first property at aged 19 for $378,000 with the help of a buyer’s agent. The property was a one-bedroom unit on Inkerman Street, in St Kilda. She’s now paying off her mortgage instead of the much higher high rent in St Kilda and has set herself up for a very promising financial future.
As we all probably wish we did what Zelta did. There are some really good lessons within this story. A one bedroom unit t is probably not anybodys dream home lets be honest, but its a phenonmal way to enter the market at a low cost. A very high demand area in St Kilda which probably has a strong rental market for one bedroom units. Not to mention Zelta will now be paying off her mortgage and building equity within the apartment and will be able to secure another property soon down the line. I’ve said it before and i’ll say it again, your first home is not your forever home. Enter the market, build a portfolio and set yourself up for the future.
Final Thoughts
Things look to be picking up with the inner city Melbourne market poised for a strong finish to the year.
Though it’s important to remember to not believe everything that you read on the headlines!
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
