First homebuyers Olivia Galuvao and Aaron Kane make their move despite rising interest rates

While rising interest rates have filled buyers with concerns, some are keen to get their foot into the housing market before it gets worse. See how one couple set themselves up for success.

A young couple has swapped the “rat race” of city life for the “relaxed” style of southwest Sydney, purchasing their first home despite rising interest rates.

When Olivia Galuvao, 32, and Aaron Kane, 34, walked into the partially built house at Gledswood Hills they instantly fell in love, and knew straight away it was the place they wanted for their first home.

But rising interest rates and cost of living expenses meant having a discussion about how they were going to safeguard themselves.

In Australia, the official interest rate has risen three times this year. The first hike came in May, when the Reserve Bank of Australia lifted the cash rate by 25 basis points to 0.35 per cent.

Mortgage holders were delivered another blow a month later, with a rate rise of 50 basis points, followed by another 50 basis points in July, bringing the cash rate to 1.35 per cent.

The increase in interest rates did not dissuade Ms Galuvao and Mr Kane from buying their first home, but they were aware of how important it is to live within their means.

Olivia Galuvao and Aaron Kane decided to prioritise buying a home rather than having a wedding. Picture: Annie Lewis

“There are going to be sacrifices for a little while but we understood that,” Ms Galuvao said.

“Aaron is very good with money in the sense that we are savers. We knew we were going to get into property with interest rates rising and to combat that, it’s career progression and saving. We have to be mindful of money and know what our expenses are, and what is a priority.

“We knew that interest rates would likely rise as they had been at their lowest,” Mr Kane added.

“There is a point I think as a first homebuyer when you might miss out on the opportunity if interest rates get even higher in a few years. If prices had gone up, we wouldn’t have been able to afford it.”

The couple had been together for nearly five years, and have spent the last two saving as much as they can to help them get closer to their dream of starting a family.

They had been living in Green Square but realised they didn’t want to raise children in the city so started looking elsewhere and southwest Sydney seemed like the right fit.

“We moved here because we wanted to be close to my parents for future children, just to have help because daycare is very expensive,” Ms Galuvao said.

“We picked this particular area because Aaron fell in love with it as soon as he walked in.

“When it came to settling down, we stepped back and realised the city was not a great place to raise children and we don’t want to live in a box forever so we made the decision to move here.”

Mr Kane said with the booming development, an increase in amenities and relative proximity to the city, beaches and other attractions, it made the area an obvious choice.

“It’s a more relaxing place,” he said. “You are not in the rat race but you are still close to the city if you need to go.”

The couple looked at properties in August last year, and three weeks later had put down the deposit on their future home. While it all happened quite quickly, there had been years of planning and saving to get there.

Olivia Galuvao and Aaron Kane. Picture: Annie Lewis

The couple said that having open and honest conversations about finances and what they wanted from the future was crucial. They decided that they would hold off having an engagement or wedding to prioritise finding a home.

“This was a priority because this was something that could eventually get out of grasp,” Mr Kane said.

“I remember when we came here I was looking at other plots, but they were more expensive.

“We were lucky that one of Olivia‘s friends works for a bank and she advised us to buy within a smaller budget to safeguard us. I think it is very important to be switched on about the potential risk.”

Ms Galuvao said buying a first home was hard, and it required being honest about want versus need.

“When I met Aaron and I was actually in debt, I was not great with money but with his help I got out of that hole quickly,” she said.

“You need to let go of what social media tells you, you need versus what you actually need,” she said. “It takes time, it takes a lot of work. I went down on a budget. But you can get there.”

‘GOOD TIME TO BUY’

Sales director at Sekisui House Australia Scott Rudgley said Gledswood Hills, and the wider region of southwest Sydney, was an attractive prospect, with the housing market remaining strong.

“There are established amenities and infrastructure and we are also seeing a lot of development,” he said.

“The Aerotropolis is an obvious example of that and it’s due to open in a few short years which will see more growth out here.”

Mr Rudgley said while the rise in interest rates had worried some buyers, that tended to be a concern for first-home owners.

“The type of buyers we are dealing with a lot at the moment are generally second or third upgrade-style buyers or downsizers,” he said.

“I think what we’re seeing at Gledswood Hills is what we are seeing across all of Sydney, and there has been a downturn in the auction clearance rates but that is giving buyers more opportunity.

“There is obviously sentiment around interest rates rising, but it is important to remember that even though they are rising, they have been at historically low levels.”

The housing market is “less heated”, Mr Rudgley said, and as a result buyers were taking a bit more time to take the leap and purchase a home.

“I think it is a good time to buy right now for that very reason, because there is less competition in the marketplace,” he said.

“We are seeing buyers take a little bit longer in their decision making at the moment and coming back multiple times.”