Australia is one of the most unaffordable counties in the world when it comes to property. As the population increases, the demand for houses and property subsequently increases. When demand is high and supply is low, the prices rocket to sky high prices, making it almost unaffordable for many. Australia is one of the top countries with the highest GDP per capita and the one of the 10 most expensive countries, costlier than many of the world’s most well-established and developed areas. With a population of about 24.4 million as of October 2016, it has a density of 2.8 people per square kilometre – this is actually a low value given the size of the country. As the 6th largest country in the world, Australia isn’t completely occupied. From 2013 to 2016, Australia’s population increased by nearly one million and around half of this increase was due to immigration. The large majority of immigrants tend to move to Sydney, Melbourne or Brisbane, which is why there is a building boom on the east coast. Many of the main cities reside along the coast of the country. The majority of Western Australia and South Australia is occupied by desert which is uninhabitable. Even though Australia has a low density of people per square kilometre, Australia is one of the world’s most developed nations. Cities including Sydney and Melbourne have even been named one of the most liveable cities in the world. The country has also seen an influx of immigrant from many countries, mainly China, New Zealand and the United Kingdom. Not only that, there is the prominent issue of asylum seekers and refugees from third world countries travelling by boat seeking to live a better life in Australia away from their war torn country. Countries include Syria, Iraq and Iran. Given the state of the world and Australia’s relatively safe position, population growth will not end anytime soon. As a developed and relatively safe country, it is easy to understand why people risk their lives hoping for a better life here in Australia. Australia’s population will not be slowing down anytime soon and with the increasing rise in population, property prices are not likely to decrease. With this said many Australian’s are in need of first home buyer loans with little interest.
Economic growth is a huge factor that comes from population and productivity growth. As the population rises, more infrastructures will be built, therefore creating more jobs and productivity. However, statistics show that the unemployment rate unexpectedly fell to 5.6 per cent in August 2016, from 5.7 per cent in July, which is below the market consensus. To date, Sydney is Australia’s largest yet most expensive housing market. Another trend that is directly affecting the prices of property in Australia is the demand for loans from Chinese investors in Australia. Chinese buyers of Australian property has surged in recent years, and recently the abrupt slowdown in demand from China is now seen as a potential risk to house prices in some markets, especially inner-city apartments in Melbourne and Sydney. With foreign investors buying Australian property, there is the problem of the decrease in availability of affordable housing for Australians. This pushes property prices higher and higher which favours foreign investors and places us Australians at a disadvantage struggling with the problem of not being able to afford and purchase a house of our own. Many of us dream about having our own house and starting a family. But for now, this dream has been put on hold for many while we wait for property prices to decrease. Currently, every Australian capital city is considered severely unaffordable but with the right first home buyer loans, you can achieve your dream home.
Banks offering first home buyer loans usually require an initial deposit fee. Many banks require 10 per cent and even 20 per cent deposit to be eligible for first home buyer loans. On top of that, you need to show evidence of regular savings over a period of time. When you are ready to start looking for your first home, a key starting point is knowing how much you have and how much you can afford to pay in monthly loan repayments. By knowing this, it will help determine the size of the first home buyer loans you can take out, and therefore the type of property you can afford to buy. Typically, when you cannot afford to deposit 20 per cent or more, you will also have to pay for Lender’s Mortgage Insurance which enables the banks to lend you a larger percentage of the purchase price. This is not ideal, especially for someone with little savings and don’t want the added cost of the Lender’s Mortgage Insurance. By paying for this added cost, it will either be included in your upfront cost or in your loan repayments so that it’s spread out over the term of the loan. In the end, this insurance protects the lender – not you. This insurance is put in place in the event that the borrower defaults on repayments. If you can’t repay your loan, it’s a cost you may want to avoid. Most of us know that the bigger a deposit is, the less you will have to borrow. This means lower regular repayments and less interest over the lifetime of the loan. Ideally, we would all love to be able to deposit a larger amount in order to pay less on interest in the long term, but not all of us are able to do so.
For first home buyers, it can be daunting to look at the property market and the high prices, especially in this day and age. Saving for a deposit can be very hard work, especially if you (like many others) have a lot of payments to make such as car insurance, petrol, electricity bills, etc. But it is a good way to get into the habit of saving money specifically for loan repayments. It also shows lenders that you’re more than capable of managing your finances. If you are someone that struggles with savings, here are some tips to help you get started:
1. Create a budget and stick to it as much as possible. The best way to save is to pay yourself first by putting your savings into a separate account as soon as you get paid. This way, you won’t be as tempted to spend it on things like clothes, shoes – impulse buys and the like.
2. Restrain yourself and cut back on unnecessary expenses. This can include memberships you don’t use, new clothes, bottled water or buying coffee on the daily. Be strict with yourself, the more you are committed into saving for your dream home, the closer you can reach that goal.
3. If you have any debt, it is best to pay it off as soon as possible. Work out how much debt you have and how you plan on paying it off. You could try paying off the debt with the highest interest rate and work your way down the list, or you may like to consolidate your debt to save on interest and fees.
4. Just because you are strict on your savings, it doesn’t mean you have to sacrifice your lifestyle. Factor in your everyday costs and try to minimise them as much as possible. However with this said, you can still pay your bills and expenses while still enjoying yourself by treating yourself every once in a while.
5. A good way to save quicker is by placing your savings in an account that has high interest that can’t be easily accessed. This way, the more you save, the higher interest you will earn, therefore enabling you to apply for first home buyer loans sooner and purchase your dream home.
With these tips in mind, you can save much more in a shorter period of time, but if you are still struggling with your savings, there are companies out there to help you out in your time of need. At Tandem Uehling, we provide professional loans in Australia for as little as a 5 per cent deposit. Yes. That’s right. 5 per cent! We have access to first home buyer loans that only require a 5 per cent deposit and you can buy your very own property that you’ve always dreamed about. Whether you are an investor, high income earner with little saved, non-resident, non-conformer, professional (in the fields of accounting, medical, legal and mining, energy and resources) or like many of Australians, first home buyers, you too can benefit from our second to none services. When you choose Tandem Uehling, we assist you in owning property by utilising our decades of experience in the financing and property market. We’re working for you and not for the banks. We provide you the right loan to meet your specific needs along with unlimited and ongoing advice. With the right tools and resources, we bring you the best possible outcome when it comes to first home buyer loans in Australia. Our committed team at Tandem Uehling are driven by results and providing our clients with the highest standards of experience that will ensure you the added peace of mind you deserve. With Tandem Uehling, you now don’t have to worry about your dream home that is now not so far out of reach.