When is the right time to buy your first home?

There is rarely a perfect time to buy your first home. It often comes with an apprehensive level of commitment and trepidation following a period of sacrifice and austerity. 

Despite this however the feelings of excitement, growth and achievement immediately eradicate the memory of a night out that changed to a night in, the dinner out you passed on to cook at home, and all the other little decisions along the way to save some money here and there that led to a big decision to go ahead and commit to the purchase of your first home.

It’s an enduring aspiration of the majority of people to one day own their own home.  In fact, home ownership in Australia ranks among the highest in the developed world. It is also arguably the most affordable it has been in many years and a compelling case for now may well be the right time.

With record low interest rates, a mortgage repayment today is remarkably comparable to the cost of rent on like for like dwellings.  There are also of course various first home owner incentives.  These are put forward by both federal and state governments as well as banks, developers and builders alike.  All of these parties understand home owners are good for economies, business and welfare and contribute to a nation building sense of pride.

In times of subdued market sentiment these incentives are more enticing, and in buoyant conditions less so.  Given what we are experiencing as a nation at the moment many incentives currently exist and are very attractive in order to stimulate the economy and encourage those contemplating home ownership for the first time.

These incentives may be in the form of exemptions or discounts on acquisition costs like stamp duty as well as grants or contributions to the cost of buying your first home.  The First Home Super Saver (FHSS) Scheme has also been in effect since 2018 allowing you to save for your home within your superannuation to a set limit in a favourable tax environment.

Banks offer special home loans specifically created for first home buyers and a range of incentives or concessions are available through these loans from recognition of repayment history on rent as regular savings, family guarantee nominations, fee waivers and cash back deals.

Various reports over the years have recognized the need to incentivise and encourage those aspiring for home ownership, advocating that the long-term benefits are substantial and assisting first home owners into the market will secure significant reward over time.

Whilst the “right” time is different for everyone, it is often proven that the sooner you are able to get started the greater the reward. For some it’s merely a declaration of “why not” and for others it’s an all-consuming deliberation, many will share some fundamental reasoning as the basis for taking a step into one of the best endeavors of their lives.  

Maturity, security, commitment, affordability are all considerations many will have pondered for some time before even attending an open home or talking to their local real estate agent let alone raising a hand at an auction or putting pen to paper.

Whilst the considerations above are somewhat commonplace among those deciding if, or when, to buy their first home, all of the and more are unique to each and everyone deliberating them, as are the circumstances and conclusions. Despite the complexities and “pros & cons” that can be created Ad nauseam, more often the basis of “is the time right?” comes down to affordability and readiness.  Are you ready for home ownership and can you afford it?

There is obviously a plethora of circumstances worthy of consideration when debating the core question of when is the right time to buy your first home.  Our advice for those of you looking to buy your first home is to simply take stock of your current place in life. Have you been a long-term renter and consistently met your rental obligation on time?  Are you in control of your finances and managing to pay your bills wen they fall due?  If you answer yes to these, home ownership for you may well be a small but rewarding step forward.

Everyone has concerns regarding job security and their ability to meet their new financial obligations once they have brought their first home, whether buying with your partner or on your own, and whether “now” is the right time. 

At what stage of your career are you and what are your long-term prospects with your employer? If you don’t feel entirely secure with your employer what industry or profession are you in?  Is this a growth or sustainable industry with many employment options from progressing and growing companies?  If you are in an advancing career with positive salary prospects it could be beneficial to start paying off a mortgage now and invest a significant contribution into your own future instead of that of your landlord.

Are you in a meaningful relationship with both of you contributing to a significant collective household income?  Sharing the responsibility and cost of home ownership can significantly ease the burden and sitting down to discuss a strategic and budgeted approach to home ownership may prove it is already well within reach and surprisingly attainable.

Once you are satisfied taking on a mortgage is within your means it is imperative that you navigate the steps toward home ownership with structure and strategy.  However motivated you may feel at the beginning of the process, poorly committed time and energy will quickly drain and demoralise you.  Failed finance applications or repeated requests for information, home inspections in stark contrast to the advertisements and missing out on incentives through misunderstanding or incorrectly lodging applications can all turn the dream into a nightmare.

IQ Capital Group offers the IQ SmartStart program specifically designed for first home buyers. We understand the journey as much as the destination… Your first home!

We are experts in all things financial and our award-winning program is tailored to provide you with collaborative professional advice in navigating your first home purchase, ensuring you not only benefit from the most competitive mortgage option available to you but receive every dollar available through the various incentives on offer.  Combinations of these incentives can be structured in a way that could currently generate tens of thousands of dollars for you to put towards the cost of your first home, and with interest rates at their current levels, paying your mortgage may be no different than the cost of your rent.

With IQ SmartStart its possible that purchasing your first home has never been easier or more affordable than right now!