A brutal property market has left homebuyers desperate, as a Sydney resident has gone to great lengths to secure a three-bedroom home.
A construction manager in Sydney has outlined the maximum lengths he has to go to buy a home in the midst of the city’s property boom.
Khaled Ismail, 28, lived with his parents for three years to save a $60,000 health deposit, but ended up looking for a home for two years as house prices soared.
He’s seen about 50 places either in person or nearly during the shutdowns, and is increasingly certain that he won’t be able to buy a place where he can raise a family one day.
He told news.com.au: “There was definitely a point although this is too much and I don’t have enough deposit and I won’t be able to make the payments.”
“I wanted something a little closer to the city and a little closer to the train station, but I thought about the fact that those areas or some of those areas near the CBD were way above my price point.”
Mr. Ismail was so desperate to find somewhere that he lined up three virtual auctions in one day during Sydney’s latest closing – just seeing the pictures and not physically present inside any of them.
“I missed one, the second was well above my price range, and the other fell into the category,” he said.
“I got lucky. The real estate agent ran a loop around all the people who had registered before and a few people were a bit nervous about doing a virtual auction, so a few interested parties didn’t show up. So I stayed with three other potential buyers and it was pretty much the case. Who was more hungry and determined to raise their hand and I think I was lucky.”
He bought the three-bedroom home in the western Sydney suburb of Dunside for $700,000 in September and using the first home loan deposit scheme meant he only needed to pay $35,000 to secure the house.
When Mr. Ismail got the keys, he said it was nerve-wracking to step inside for the first time knowing he couldn’t change his mind about the purchase.
He added that he was happy and excited to finally be a homeowner but there was one overwhelming emotion.
“After so many years of trying to get one,” he said, “it was a huge relief, the kind of relief trumping anything else.”
“It means I don’t have to look anymore, I don’t have to save as much, and I can make payments, so it’s a relief to have my own place.”
Ismail admits that many of his friends are “scared” about whether they will be able to buy a property after seeing prices go up.
But it’s not all bad news.
For early-stage homebuyers trying to make their way into the property market, there are currently over 3,960 suburbs in Australia where you can score a home for less than $100,000 in savings.
But in Sydney you have to settle for an apartment if you want to be close to the city.
Surprisingly, there were fewer options for apartment hunters in 1,900 Australian suburbs offering units that can be purchased with a deposit of less than $100,000, according to the Aussie Home Loans Suburb Spotter Map, backed by CoreLogic data.
In Sydney, a 10 percent deposit between $60,000 and $85,000 is giving people the chance to become homeowners in western and northwest Sydney, including Box Hill ($61,150), Blacktown ($81,302) and Riverstone ($81,600). Penrith ($79,500) and Marsden Park ($84,800).
Sydney homebuyers who want to live close to the city can snap up a unit for less than $100,000 in the bank in trendy suburbs like Ultimo with a deposit of just $71,500, and Chippendale with a savings of $72,510, while Mascot pays a down payment to $83,000 and Marrickville sits at 81. 500 dollars.
For those looking for a nautical change in NSW, a 10 percent deposit can buy you a place at Wyee ($41,500) in the Lake Macquarie area, Raymond Terrace ($45,000) in Hunter, and Goulburn ($47,500) In the Southern Tablelands, Oberon ($38,000) and West Bathurst ($37,625) are in the Central Tablelands.
Rising property prices and clamping down on how much people can borrow have created concerns about housing affordability, said Brad Crump, chief distribution officer at Aussie Home Loans.
“We wanted to show homebuyers that there are still opportunities to enter the real estate market if you broaden your research into suburbs and adapt your thinking about how to structure your home loan,” Hazen said.
You don’t always need a 20 percent deposit to buy a home. There are 5 percent and 10 percent home loan options where you can get a guarantor or access government support such as a first home loan deposit program or a Lenders Mortgage Insurance (LMI) payment, which can form part of your home loan option. “
Australian data showed that nearly one in five borrowers had taken out a home loan with Lenders’ Mortgage Insurance (LMI) in the past 12 months.
LMI is a one-time, non-refundable, non-transferable premium that is intended to protect the lender from financial loss if the borrower cannot afford to repay his home loan installments. It can be paid up front or added to your home loan.
“Some banks and lenders even offer discounts or special offers from LMI, and for some professions they can also waive LMI, so it is worth talking to a mortgage broker to see if this could be an option for you,” added Mr. Crump.
The Suburb Spotter map revealed that the top three suburbs seen to deposit an average home under $100,000 were Melbourne’s outer suburb of Heidelberg West, which requires a 10 percent deposit of $75,000, followed by Box Hill in Sydney with a savings of 61, $150 required, Melbourne. Inland West Footscray, Pay up to $94,075.
Mr. Cramb’s tips for buying a home include thinking about where you might want to compromise, doing your homework by researching the suburbs and regulating informed consent.
Most Viewed Suburbs on the Map for a Home Requiring a Deposit Under $100,000
1. NSW – Box Hill (10 percent deposit $61,150) and Wye (20 percent deposit $83,000)
2. Victoria – Western Heidelberg (10 percent deposit of $75,000) and Dallas (20 percent deposit of $100,000)
3 – Queensland – Karina (10 percent deposit $75,050) and Acacia Ridge (20 percent deposit $90,500)
4. South Australia – Adelaide (10 percent deposit $70,525) and Ascot Park (20 percent deposit $96,200)
5. Western Australia – Scarborough (10 percent deposit $78,200) and Nullamara (20 percent deposit $79,000)
6 – Tasmania – Kingston (10 percent deposit $63,050) and Glenorchy (20 percent deposit, $96,000)
7 – Northern Territory – Ludmila (10 per cent deposit of $56,200) and Bakewell (20 per cent of deposit of $93,200)
8. Australian Capital Territory – Philip (10 per cent deposit of $56,650)