Rentvesting is a perfect start to get into the property market

How to buy a home

With the soaring prices of housing in Australia, it’s becoming increasingly important to have a well-researched and informed approach when entering the property market. While First Home Buyer incentives are a great starting point for those looking to buy their first home, there are other ways to enter the market.

Maybe the bank of Mum and Dad, where you can borrow money from your parents, is the right option for you. Another option is to become a rentvestor, which means you can live in the place you want while someone else pays off your investment property. Alternatively, have you considered buying a property with your friends or family? This can be a great way to pool resources and share the responsibilities of homeownership.

First-time Property Purchase In Australia

In the early 1990s, the cost of a home was the equivalent of about two and a half years’ worth of the average wage, which provided a relatively affordable housing market. However, over the years, the cost of entering Australia’s property market has significantly increased, reaching a point where it now exceeds six years’ worth of the average wage. This substantial rise in housing prices has created challenges for many individuals and families trying to enter the real estate market. In fact, in 2022, the median price for a house in a capital city skyrocketed to over $928,000.

This means that for many first-time property buyers, saving for a deposit can be a daunting task. Not to mention coming up with the funds for things like stamp duty and legal fees. However, with careful planning and research, there are still ways to enter the market and achieve your dream of owning a home.

4 Ways to enter the property market

Whether you want to leverage government incentives designed to assist first-time buyers, delve into the world of rentvesting, lean on the ‘Bank of Mum and Dad’ approach, or explore buying property collectively with friends, there are multiple ways to make your first property purchase a reality.

Summary

With Australia’s property market continuing its upward trajectory, first-time buyers should not feel that entering the property market is out of reach. It may require some creative thinking and financial planning, but options such as government grants, rentvesting, parental support, and buying with friends can help make the dream of owning a home a reality. Owning your own home remains an important step towards long-term financial stability, and with the right approach, it can be achievable for first-time buyers.

Looking ahead to 2024, surging demand for housing will soon surpass current housing supply in capital cities. Currently, construction of new properties remains at decade lows, exacerbating the shortage. While the Australian government has implemented initiatives to incentivize developers to build more affordable homes, it is unlikely to make a significant impact in the short term. This shortage of housing supply will continue to drive up property prices, making it essential for first-time buyers to act quickly and strategically.

Don’t do it alone, Ironfish is here to take the headache out of property investment.