Proof buying first home ‘isn’t impossible’
Sydney couple Hugo Da Silva and Bindi Cormack decided to take the plunge and buy their first property last January.
Less than a year later, they're now the proud owners of a "huge" three-bedroom apartment - but despite that impressive feat, they insist it's not an impossible dream.
The couple bought their spacious flat in North Parramatta for $610,000 recently, which comes complete with two bathrooms, an extra bedroom and even a lockup garage.
And they pulled it off by a combination of strategic saving, buying a little further from the CBD and by relying on their parents for help - something online home loans marketplace HashChing estimates 54 per cent of first homebuyers now do.
Mr Da Silva, a PE teacher who earns around $80,000 per year, told news.com.au he had spent the last year living rent-free with his parents in their Campsie family home after returning from a stint in the UK.
The 33-year-old's parents also acted as guarantors for the young couple, which they say helped them achieve their home ownership plan sooner.
"I was living in the UK last year and when I arrived back in Australia in January, I made it a goal of mine to buy a place this year," he said.
"I had savings when I moved to the UK but it took a bit of a hit after travelling.
"But I got straight back into work in Australia and started saving every week by putting about 60 per cent of my salary away into savings with the goal of buying a place, which my partner wanted to do as well."
Mr Da Silva said moving back in with his family had allowed him to save the bulk of his income while still having enough money left over to cover $200 in bills each week and to still maintain a social life.
Meanwhile Ms Cormack, who works for the state government and earns around $140,000 per year, was able to save around 40 per cent of her salary while still paying close to $400 per week in bills and expenses.
The 31-year-old was able to do so comfortably by also living with her family and being charged a lower rate of rent than she would if she rented privately.
She also had some existing savings which she added to over the last 12 months.
Mr Da Silva acknowledged he had been given a helping hand by his parents.
"When I got back I moved in with my parents and I was very fortunate they didn't charge me any rent, so I was able to save quite a bit of money but still maintain a normal life which was a huge help. If I had been paying rent while trying to save, all of my income would have gone towards rent," he said.
"With my parents as guarantor we're actually borrowing 100 per cent and using our savings to renovate.
"We still could have gotten a loan - we didn't have a 20 per cent deposit, but based on our savings there were loans available to us - the choice of banks we could have gone with was just fewer. But as soon as we put my parents down as guarantors we had hundreds of different options."
It also means they have avoided having to pay mortgage insurance - and they also made additional savings by buying a place under the stamp duty exemption threshold of $650,000.
Mr Da Silva said buying a home was actually easier than many first homebuyers thought, especially if they followed his strategy of moving in with family and using parents as guarantors and buying in cheaper, better value suburbs slightly further from the CBD.
"Having our parents help out definitely made things easier but it isn't impossible to do it without help," he said.
"You just need to manage your money well and set goals.
"Having a budget helps, and so does setting up a few different accounts for different bills. If you manage your money that way, with percentages of your salary automatically set aside, you can't really go wrong with that approach."
He said the process had also gone smoothly after enlisting the help of a broker, and that moving out of the inner west was also a savvy financial move.
"I lived in the inner west my entire life and I wanted to stay there but our budget was $650,000 and the places we looked at were tiny shoeboxes that needed heaps of work with tiny living spaces that we would outgrow really quickly if we had a family," he said.
"I wasn't too keen on the idea of moving to Parramatta at first but after looking at places for one weekend I saw what our money would get us there in terms of the size of places. We ended up getting an extra bedroom and bathroom, a lockup garage and huge living space and after wandering around Parramatta and seeing the amenities available I was sold.
"Everyone would love to be closer to the city but the way the property market is and the way it has always been, every generation has to buy property further west."
He said for first homebuyers, now was the time to strike.
"This was the only offer we made so the first place we wanted, we got," he said.
"Now the market is red-hot for buyers and at most of the inspections there was no one else there, just us.
"There was no competition and in terms of the process of buying and negotiating, it was easy."
Mr Da Silva said the couple spent about six weeks viewing properties before making an offer.