Owning property is a dream that spurs many people to work harder and build their careers. However, when you are just starting out in life, it's often hard to save enough capital to climb even the lowest rungs of the property ladder.
Every year, thousands of young Australians emerge from university, but how long do they have to wait before they can own their own home? Actually, the average age of first-time house buyers in Australia is around 38 years old. Before then, it's a matter of paying a premium to rent or rooming with mum and dad, and neither of them are ideal options.
But wait. You don't need to fold your body into a tiny flat in one of Sydney's suburbs, and you can forget about having to mow the lawn every week to keep your parents happy. There are options for young property buyers. Here are some suggestions.
Low Income Can Still Be Fair Dinkum
One way to own property without saving hundreds of thousands of dollars is to apply for a low income home loan. If you have a steady but unspectacular income, there's no need to defer home ownership until middle age. Some banks have special deals for people who earn up to a certain amount (usually between AU$40,0000 and AU$60,000). If your income falls under their threshold, these banks will top up a conventional home loan, allowing you to afford a larger property. Most of these packages also come with interest free grace periods, enabling home owners to build up their cash reserves to cover mortgage costs when the normal rate kicks in.
Reach Out to Cooperatives and Join a Thriving Community
Another option is to explore the world of housing cooperatives. Cooperatives pool the financial resources of their members, allowing them to access lower interest rates and larger pools of capital. They also organize new housing developments and sell stakes to members at relatively low rates. The downside is that exiting the cooperative isn't always easy, and rules tend to make it hard to realize capital gains from your investment. They also tend to attract more "alternative" kinds of person due to their idealistic roots, so cooperative living isn't for everyone.
Take the Hassle Out of a Strata Property
There is another option to think about, and this one might be the most realistic of all. Strata developments involve a cluster of adjoining properties (generally apartments). In these schemes, buyers purchase the title deed to their property, but everyone in the development shares responsibility for maintaining common areas and keeping the buildings safe. Strata developments are often very affordable, but attending meetings and sharing the administration of the building can be a chore. However, many schemes outsource the hard work to body corporate services. If you want cut-price housing without the hassle, those are the kind of schemes you should look at.
If you are young and your income doesn't yet match your ambition, you can still own a home without running up a massive debt. Whether you look for a strata property, join a cooperative or seek a low-income loan, alternatives exist and you don't need to put off home ownership until you hit your late 30s.Share
3 August 2016
In the past few years, the Australian real estate market has boomed almost like never before. Many homes that were once considered just regular single-family homes are now priced as if they are luxury properties. If you are getting ready to buy a new home -- whether it's a luxury property or anything else -- you need tips and ideas to help you. Hello and welcome. My name is Amanda, and I recently upgraded from my flat to a luxury property. I wished that I had a buying guide or a blog to help me through the process, and because of that, I've decided to create this blog for other people who are looking for real estate. Enjoy.