The grass always seems greener on the other side of the fence, doesn't it?
First home buyers are going to desperate lengths to afford a property – including purchasing interstate.
According to Finder’s First Home Buyers Report 2021, which surveyed 1,028 first home buyers, 1 in 5 (20%) prospective homeowners are searching for their first property in a different state to where they currently reside.
That’s an estimated 2,362 Australians per month who are prepared to buy in another state to get a foothold in the property market.
The report found that first home buyers from New South Wales (24%) are more likely to consider buying a property in another state than those living in Queensland (19%) and Victoria (17%).
Sarah Megginson, home loans expert at Finder, said that many prospective buyers are being lured by cheaper property across state borders.
“Some first home buyers are looking at real estate in other parts of the country where prices are more affordable, with many feeling the pressure to buy while interest rates are low.
“The impact of COVID-19 has also caused a spike in demand for regional properties, as residents in Sydney and Melbourne consider swapping city living for more of a laidback lifestyle.
“With property prices soaring in recent months, it can put additional pressure on first home buyers, who may find themselves priced out of their own city.
“This is where an interstate move can work to your advantage as a prospective buyer.
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“Even if you’re not keen to move, a rentvesting strategy – where you buy a more affordable home in a different location and continue renting where you want to live – offers a way to get your foot on the property ladder,” Megginson said.
Finder’s First Home Buyers Report 2021 also found that men (24%) are more likely than women (17%) to be considered an interstate move to get into the property market.
According to CoreLogic, the median sale price for a house has reached $1,030,000 in Sydney, followed by $806,000 in Melbourne.
Megginson urged buyers not to take action too hastily, and only purchase a home when they’re financially ready.
“You’re better off spending a few more months getting your finances into shape and waiting until you can comfortably afford your mortgage repayments, regardless of what other people might be doing.
“Focus on your own timeline. Think about things you can do to cut costs and speed up your deposit savings.
“If you’re still keen to buy sooner rather than later, purchasing interstate could be for you.
“Another option could be doing a joint venture with your parents or sibling; it can make buying a property more affordable and help you spread the risks,” Megginson said.
Tips for buying interstate:
- Consult an expert.
Unless you have the time to research, or you’re already familiar with the market in the state you want to buy, consider enlisting the services of a buyer's agent to help you navigate your purchase.
They can help you save time and money when buying interstate, and ensure you’re paying the right price for a property.
- Take advantage of entitlements.
Stamp duty laws differ across the states and territories, as do government first home buyer grants and concessions.
Make sure you’re across your eligibility entitlements prior to purchasing a home in another state.
Buying a property in another state, even if you don’t live in it, will usually mean you’re ineligible for any first home buyer grants and concessions in the future.
- Research state markets.
While the property market may be booming in your home state, the situation could be very different elsewhere.
Research the market in the state you want to buy in to find out where it is headed, and at what stage of the cycle it's in.