First home buyers NSW: Achieving the Aussie dream for $50K

My husband and I achieved the Australian dream of home ownership as first home buyers for just $50,000 - all while saving $150,000 in government benefits - here’s how we did it.

If you’d asked me five years ago whether my husband and I could achieve the Australian dream of home ownership in Sydney before age 30, I would have gawked.

Then if you said we did it with $50,000 and while saving $150,000 through government benefits, I would have fallen off my seat.

Housing affordability has deteriorated to its worst level in a decade in Sydney, with prices soaring 30 per cent to a median of $1.5 million, slowly and painfully pushing young people out of the market and widening the intergenerational gap.

Loans to first home buyers fell 11 per cent in September compared to the previous year, according to the ABS. If we continue on this trajectory, Millennials and Gen Z will be the government’s greatest liability at retirement.

The Daily Telegraph’s Georgia Clark says breaking into the Sydney housing market as a first homer is still achievable - with some hard work, research and flexibility. Picture: David Swift

But while it may not seem it, it is not all doom and gloom for aspiring first homers. Although more needs to be done to support young people to enter the market – like abolishing stamp duty and replacing it with land tax, as proposed by Premier Dominic Perrottet – there are still savvy ways to get in.

Just when my husband and I were losing faith as property prices soared, we snagged a two-bedroom unit 30 minutes from the city in Sydney’s northwest. It was a combination of disciplined saving, government benefits, a bit of help from the Bank of Mum and Dad, timing, being flexible about location and size, and going through a small bank.

As a starting point, nothing beats good old-fashioned saving. This means cutting back on the avo on toast and eating out, getting rid of debt, finding a high interest savings account and improving your credit score. This will help with loan approval and securing a good interest rate.

Support is available to first home buyers and taking advantage of government schemes is the best thing you can do. We purchased through the First Home Loan Deposit Scheme, which meant we only ­needed a 5 per cent deposit, saving us more than $100,000 on the deposit and $30,000 in Lender’s Mortgage Insurance.

Keep in mind, however, there are limited places in the scheme so it is best to get in quick unless, of course, you have someone willing to act as a guarantor.

We also made sure the property was less than $800,000 to take advantage of stamp duty savings through the First Home Buyers Assistance Scheme, which saved us about $15,000 in property tax.

Flexibility is also key in the current market. Initially, we were looking at houses and townhouses in the city’s west and northwest, attracted to the idea that we could own a piece of land.

As property prices skyrocketed during the pandemic we were forced to change tack and quickly realised that units were the most realistic way to enter the market – we could always upsize later once we had built up some equity.

Timing is another critical factor. We snagged a good deal because the owners were in a hurry to sell as they had purchased another property and were paying two mortgages. If you can find a vendor who is motivated to sell (for the right reasons), that will serve you.

Once you find the right place, you may have to get in quick. We had to gazump (offer a higher price before contracts are exchanged) another buyer in order to secure our property.

When it comes to actually getting the mortgage, we also saved big on interest and fees by going through a small bank. Banks like Australian Mutual Bank, Bendigo Bank and HSBC are still offering rates lower than 2 per cent.

With housing prices predicted to fall in 2023 as interest rates rise, it’s a great time for first home buyers to think about entering the market.

While it may not seem it, the Australian dream is still achievable for young people, with some hard saving and research.

And as they say, the only bad time to buy property is never.