The impossible dream might be possible after all…
If you’ve read a newspaper in the past 10 years or so, chances are you’ll have seen an alarming headline or two about how property prices are going to continue to climb and if you don’t get into the market now, you may never own your own home. It’s true, of course— house prices have skyrocketed in Australia over the past decade. However, the clickbait headlines would have you believe that there’s no way to own your own home unless your generous parents hand you a front-door key for your 21st birthday (and I’m not talking about one of those giant cardboard keys). If you want to own a home, there are ways to make it happen.
1. Consider ‘rent-vesting’
Nerida Conisbee, chief economist at realestate.com.au, says rent-vesting is an excellent way to own your own home, fast. “Rent-vesting, where you buy an investment property that you rent out, and rent in a suburb you like, is a great way to get into the property market,” she says. “You get to live in a place that may be too expensive for you to buy and buy in a place that you can afford, while someone else pays the bulk of — if not all of — the mortgage.” She adds that, while it is expensive to buy property at the moment, rents have stabilised and in some places are dropping. The only drawback is that you may not receive a first home buyer’s grant, but other benefits such as negative gearing and tax breaks outweigh this. “Investments like rental properties are also tax-deductible, so you’ll be able to write off many expenses.”
2. Buy with friends or family
“The number of places where a single person on an average income can afford a property is low, particularly in expensive cities like Sydney and Melbourne. For this reason, buying with someone else makes sense,” says Nerida. There are plenty of loans that allow you to buy with a friend, or that are less risky if your parents are going guarantor for you. Ask for a family loan. There are also loans where, if your parents lend you some money, the loan is structured so that you actually pay your parents back first, and then the bank. However, it’s important to have a legal agreement before you sign on the dotted line as home Ownership problems can arise if one person wants to sell, or if someone can no longer pay their portion of the mortgage. And remember the little things — take time to consider how you’ll divvy up even small expenses, such as maintenance.
3. Invest without owning
If you want to get into the market, or even just earn a little passive income, look at Australian real estate investment trusts (A–REITs). For as little as $500, you can invest in a property with others and receive dividends. They’re usually stockmarket-listed ventures that specialise in commercial properties. It’s a great way to invest in property with very little risk.
4. Boost your deposit with free (!) government money
Each state government offers a lump sum for first home buyers. Here’s a handy guide.
- ACT: $10,000 for new, off-the-plan or substantially renovated properties
- NSW: $10,000 for new homes under $750,000 NT: $26,000 for any new home
- QLD: $15,000–$20,000 for new homes (built or bought) under $750,000
- SA: $15,000 for new homes up to $575,000
- TAS: $10,000 for new homes, off-the-plan homes or owner-builder homes (it’s $20,000 until June 30, 2017)
- VIC: $10,000 for new homes up to $750,000
- WA: $10,000 for new homes (built or bought) up to $750,000, or up to $1,000,000 in remote areas (above the 26th parallel)
5. Buy off the plan
Buying a property off the plan can often be cheaper because you can’t see it and you have to wait for it to be built. What’s more, completely new dwellings often aren’t subject to stamp duty, so you’ll save money there too. There are also tax depreciation benefits. That said, buying off the plan poses some risks. “Read all the contracts very carefully,” says Nerida. “In areas that are seeing a lot of development, the value of the property can decline from the time you buy to when construction is complete. Also, the project may stall if the developer runs into problems, or there may be quality issues once the project is complete, so it is important to choose a reputable developer.”
6. Get outta town
Due to the housing crisis (remember all those screaming headlines?), some state governments have begun incentivising property in regional areas, so a move to the country could mean an awesome tax break, or even a lump sum grant (read: cold hard cash). Prices tend to be much lower in these areas anyway, so if you’d like that home among the gum trees, it’s worth googling ‘country change’ or ‘Evocities’ for more information.
7. Get a side hustle to help you save
You’ve got a full-time job but you still can’t seem to save as much as you’d like? Enter the side hustle. Here are some ideas: Rent out your car space. If you have a car space you don’t need, earn extra money for doing pretty much nothing by renting it out. Go to findacarpark.com.au for information. Take back your unused purchases. If you’ve got three dresses hanging in your wardrobe with the tags still attached, you’ve got a problem. Return them, get the money back. Easy. Get on Airtasker. There are thousands of odd jobs on this website, with varying fees. If you’re one of those people who finds putting IKEA furniture together a breeze, then make some money from it. Go to airtasker.com. Be a tutor. If you aced English or maths, advertise your services as a tutor. Rates vary, but you can get around $50 an hour. Love puppies? Kids? Or both? Then you’d be an awesome babysitter or pet sitter. To find one-off, short-term and long-term babysitting jobs in your area, go to findababysitter.com.au. For pet-sitting jobs, go to pawshake.com.au or petsleepover.com.au. If you’re an excellent driver and you know your way around town, become an Uber driver. Choose when you want to work and, once you’ve earned enough, simply turn off the app.
8. Live rent free
Imagine how much you could save if you didn’t have to pay rent. Well, it’s possible. Sign up as a house sitter on or . In addition to allowing you to live in their home, some homeowners will even pay you a fee, which is basically free money. Good luck!