Victorian first-home buyer guide: where to buy and what you’ll spend, according to Hotspotting, Canstar report

Real estate guru Terry Ryder has identified the best options for buyers around Melbourne to make a start on the property ladder. See the affordable suburbs where prices will grow.

First-home buyers with a bit more cash to splash might consider something like 31 Cottage Blvd, Epping

Apartments in the CBD and Kensington as well as houses in Meadow Heights and Kalkallo

are the best bet for first-home buyers struggling to break into Melbourne’s property market.

But they could have a window of as little as six months to make a move before home price rises combine with rate hikes to sideline their home dream.

A new guide by Canstar and Hotspotting.com.au real estate guru Terry Ryder has identified the four suburbs as the best options in Melbourne to make a start on the property ladder.

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The guide factors in exactly how much money a first-home buyer will need to cover a deposit and other purchasing costs in key suburbs, which also include Sunbury, Tarneit and Epping.

It shows getting a start in Melbourne is possible for as little as $51,678 for those buying a $430,000 median-priced CBD apartment.

For those determined to buy a house, first-home buyers would need at least $70,733 to get the keys to a $580,000 typical home in Meadow Heights.

Those prepared to leave the big smoke, could get a median house in Stawell for $350,000 and need just $42,102 saved up to get started.

The sums include mortgage registration and transfer fees, a 10 per cent deposit, lenders mortgage insurance and a stamp duty waiver from the state government for buying your first home.

Canstar’s editor-at-large Effie Zahos said even after 12 interest rate hikes, first-home buyers still had options.

“There are plenty of affordable places out there, it’s just a case of finding what meets your needs,” Ms Zahos said.

The guide also calculated the cost of keeping a home in Melbourne, noting monthly mortgage costs as low as $1868 for a CBD apartment, if you can buy with a 20 per cent deposit.

Those hoping for a house will need to be able to cover at least $2519 a month in order to keep the roof over their head in Meadow Heights.

A three bedroom house could be yours for $410,000-$450,000 at 33 Gunbower Cres, Meadow Heights

A budget under $400,000 could cover a CBD apartment like 4109/220 Spencer St, Melbourne

The report’s release also coincides with an extra 50,000 places becoming available in the revamped federal government Home Guarantee Scheme this month, which will help more struggling buyers enter the market with a 5 per cent deposit.

It’s one of three ways affordability-sensitive buyers can slash the entry cost of getting into the market, and joins co-buying options including the federal government’s Help to Buy Scheme and the Victorian Homebuyer Fund from the state government — both give buyers a chance to make a start in the property market with 5 per cent equity or less in certain circumstances.

Hotspotting director Terry Ryder said now was a good opportunity for first-home buyers, and noted while current prices in most areas remained well below their peaks in 2021 and early 2022, recent sales patterns showed price growth was picking up.

If you can cover a deposit for $380,000-$410,000, then you might be able to buy 13/12 Mawbey St, Kensington

With a price tag from $298,000-$327,500, there’s affordability on offer at 56 Ligar St, Stawell

“The best you can do as a buyer is purchase well in a good area when it is down and before prices grow again,” he said.

And for buyers forced to look at suburbs that might not have been on their radar, he added many of those in the report had a strong possibility of gentrifying.

“There are (also) many instances where people have bought in (stigmatised) areas because that’s all they could afford and they’ve realised it was much better than they anticipated,” Mr Ryder said.

Property Home Base flat-fee buyer’s advocate Julie DeBondt-Barker said buyers needed to move quickly and warned those who delayed risked being priced out, potentially as soon as Christmas.

A two-bedroom start in the CBD could be yours for $515,000 at 902/39 Queen Street, Melbourne

In Bendigo you can start on the property ladder for $450,000-$470,000 at 5 Jackson St, Long Gully

“In the last four weeks the market has really woken up and the price growth is starting to be a factor for knocking people out of the market as well (as rate hikes),” Ms DeBondt-Barker said.

That might mean some need to make tough decisions to change their desired location or to compromise on home features urgently.

“Small sacrifices today will be larger in six months time,” Ms DeBondt-Barker warned.

But, with a rate rise possible on Tuesday she said all prospective buyers should reconfirm how much they could borrow before making any offers.

WHY WE STARTED IN SUNBURY

After more than a decade renting, Jacquline Ilsley is moving into her first home later this month with her daughter Lacey, 5.

The swap from paying a landlord to paying a mortgage will save them hundreds of dollars a month as the mortgage works out cheaper than their old lease.

Their dream home would have been a country block near Macedon, but affordable homes in Sunbury were the right fit for their first step onto the property ladder as interest rates rise.

“Interest rates were a worry, because we didn’t know how much they would go up by and if that would put us out of the price range and houses that we were looking at,” Ms Ilsley said.

Sunbury is a popular spot for first-home buyers who are seeking out homes like 6 Maguire Drive

They plan to enjoy the family-oriented neighbourhood for the next few years and reconsider their options for a home with a bit more land at a later stage.

“And I’ll get to have an actual dining table instead of crowding around the couch or the coffee table,” she said. “It will be nice to have a place that feels like home.”

YPA Sunbury director Patrick Kilkenny said the suburb in Melbourne’s north west was one of the best value offerings in first-homebuyers’ reach, with easy access to freeways and a growing population as well as increasing local job opportunities.

But with strong first-home buyer demand already in the area, Mr Kilkenny advised acting fast.

“Average days on market now is around 28-30 days, but it can be a lot quicker,” he said.

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Originally published as Victorian first-home buyer guide: where to buy and what you’ll spend, according to Hotspotting, Canstar report