Cheap property is a contradiction in terms, especially if you’re trying to crack into the market in Australia’s biggest cities and towns.
But for the first-time homebuyer or those wanting to buy a modest investment property, there are still a few ways to beat soaring prices and secure a foothold in the property market.
Manage your expectations
Want a converted loft in Newtown or a 2-bedroom Deco apartment in St Kilda? Looking for a classic Queenslander in New Farm or a bluestone in Battery Point?
For most people trying to buy their first place to live, these are unattainable targets. It doesn’t mean never; it just means not now. It’s important to work out what you’ll accept versus what your dream is. It all depends on your individual circumstances.
Some people can forgo a car in order to be closer to public transport and town centres. Some can cope with a small kitchen while others need to cook for a family. A long commute to work? Walking distance to shops or schools? These are the crucial life questions buyers need to ask and answer. European appliances, polished floorboards and off-street parking might be nice, but they can wait.
Abundance of supply
Some places have an oversupply of a certain type of property. Units and apartments, for example, are frequently available in plentiful supply in certain towns and suburbs. A location with lots and lots of apartments for rent and sale offers an opportunity for bargains. It’s classic supply-and-demand economics.
As governments shift towards encouraging more high-rise apartments on public transport routes (especially in our biggest cities), we’ve seen a big increase in the construction of one, two and three bedroom apartments close to town and city centres, in preference to the traditional stand-alone house. Developers follow the money!
Finding hot spots
Not all apartments are equal. Some are brand new deluxe affairs with large balconies, city views, fancy kitchens and security entrances. Others are older (or actually old), with Laminex countertops, small fridge nooks, plush-pile carpet and brown-tiles bathrooms. Guess which ones are a potential bargain?
Most people looking for a place to call home have their eyes on a particular suburb or area. More places for sale dilutes the pool of people searching.
Do some searching on the real estate websites and check in with us at Mortgage Broker Group for an idea of areas near you with a good supply of apartments. If there are new apartment buildings, look for older ones nearby. If there are leafy side streets, see what’s available on the main road. You’re actually looking for B-grade places! Get in, pay the mortgage (and a bit more if you can) live comfortably for a few years, then move up the property ladder.
Our expert brokers can help you find apartment clusters that might offer good value, but here are some of the areas to think about:
- NSW: Ultimo, Enmore, North Sydney, Kingsford, Petersham, Campsie, Liverpool, Cabramatta
- Vic: Elwood, Brunswick, Hawthorn, Thornbury, Box Hill, Footscray, Sandringham
- Qld: Fortitude Valley, Bowen Hills, Saint Lucia
There are similar places in other capitals and larger towns in Australia. Focus your search along public transport routes and near universities. If you’re not sure where the best spots to look are, we can help.
And then what?
You might be surprised. The apartment might turn out to be exactly what you want. Close to things, easy to manage, and easier to pay off as your income rises and your mortgage slowly decreases).
Otherwise, after just three or four years, you’ll possibly have some equity (your apartment might have continued to increase in value). You could be in more stable employment or even earning more. There might then be an opportunity to sell and purchase something a bit bigger and a bit closer to where you want to be. It’s not unusual for people to buy and sell four or five times before finding their long-term home.
Talk to us
Looking to get a toe-hold with a place you can live in? Or maybe you want a small investment place to offer as student rental or for short-term stays? Contact us at Mortgage Broker Group. We have experts across Australia who understand real estate markets in every region. So if it’s a big-city purchase, a small-town shift, or an entry into the investment market, drop up a line today.