How to buy a first home
Updated: Jun 3, 2019
I hear many people despair at how difficult it is for young people to buy their first home. How expensive and unfair it is. Depending where you live, yes, homes may be expensive. Even the smallest apartment may seem well out of reach. But I don’t, personally, think that it is necessarily impossible for young people to buy a home. However, it may take hard work, extreme patience, persistent saving and some flexibility.
In the last 6 months I’ve had the absolute pleasure of speaking with not one but three (yes, THREE) motivated and hard-working people who and are on the cusp of paying off their mortgage. And these are not just any “soon-to-be-debt-free” people, they are people in their thirties. Yes, you heard me right. These people have not yet turned 40 years old and they have just about paid off their mortgage. (We financial advisers generally get really excited when we meet such people!)
In the last 6 months I’ve also talked to numerous people who have said things like “it’s so expensive, how does anyone get in”, “young people can’t do it, it’s too expensive these days”, “how are you meant to save a deposit when rent is so high”, “when I get a payrise I’ll be able to save”.
I’m seeing people buying their first homes, and I’m seeing people paying off their homes, and these people don’t necessarily have high incomes or parental assistance. The things that they tend to have in common is that they are sensible and aware when it comes to spending, and they have sacrificed and worked hard to be where they are.
There may be some lifestyle sacrifices that need to be made if you want to buy your first home, and you may need to be flexible. You might even need to completely re-think your lifestyle. Here’s a few things to consider in terms of how flexibility may help.
Remember that none of this is advice, these are just a few ideas to consider:
- You may need to consider looking in cheaper parts of town.
- You may need to consider an apartment rather than a house.
- You may need to consider moving somewhere with cheaper rent. Can you move somewhere cheaper? House share? Move back home? Move further away and work remotely a few days per week?
- You may need to sacrifice things like holidays, nights out and new clothes.
- You may need to be prepared to save hard for a long time to get there!
I don’t think it’s easy, and I understand that everyone’s situation is different and that there may be extenuating circumstances. But I do think that for many people with hard work, re-thinking options and concentrated effort, it may become much more possible.
If you’re working to save for a home and need some help, feel free to get in touch. As a financial adviser this is one of the areas that I cover, so I’d be happy to have a chat about how I might be able to help you.
Alison Kaigan – Your Canberra Financial Adviser