A recent St George Bank survey of 1,000 first-time buyers in Australia showcased that affordability is no longer the most important factor for first-time buyers today, but rather the potential to increase the value of a home. This shows that the concept of investment is becoming more and more prevalent, even for 'new' home buyers. According to SBS Australia, the survey revealed the following factors that first time home buyers in Australia consider when buying a home. Affordability, potential to add value, proximity to workplace, proximity to shops, relatives and friends.
With factors such as more stock market money flowing into the property market and the mortgage market imposing strict approval policies for overseas investments, it seems that the choice of the property has to be carefully considered for value-add.
According to the report, respondents generally said that evaluating which property would increase in value faster was the most difficult task in the property shopping process.
The survey also found that nearly a quarter of first-time buyers have had to compromise on their purchase for a variety of reasons. Nearly half have compromised on the location of their home, and almost an equal number have compromised on the price of their home.
They all accepted more than they had budgeted for and eventually closed the deal, although most initially used their budget as the basis for choosing a property. However, considering the rate of return, they eventually opt for a compromise. This also requires that this type of buyer is very careful in their choice of property when purchasing a home.
Indeed, some property values really do double every decade, and all of them have these common factors.
1. What kind of location is a good location?
After all, children are always the most important members of the family and parents are willing to spend extra money to provide the best environment for their children to grow up in. And investors are also very savvy because the value of a school district home can only go up.
2. Areas with government construction plans are also geographic locations that have a lot of room for price increases
In the 2036 Greater Sydney Plan, the North West Sydney area is planned as one of the cores of the future Greater Sydney region. A number of complementary employment and service centres, schools, shopping and other community services are located here, while the total investment of $8.3 billion in the construction of the North West Railway is the largest transport investment in Sydney and Australia as a whole in recent years. The railway will be officially opened for operation in the first half of 2019 at the latest. With the M2 motorway and railway, the North West has a strong development momentum.
Generally a good suburb, the security is also very good.
4. Houses near the water.
Riverfront or waterfront homes are very expensive, which has led to property prices along Sydney's oceanfront now being almost unattainable.
5. Differences between residential properties
These properties tend to perform better with good natural light, high street locations, for example.
Whether the market is up, down or oscillating, properties that have been renovated are located on quiet streets and are close to transportation and infrastructure will always attract buyers and often sell for more than their market value.
Other factors such as park frontage with a great view, backyard orientation, natural light and extra space make a big difference in property value.
Street views are also important as buyers who choose a home on a street that is 80 to 90 per cent of the same or similar architectural style will almost always have more long-term gains.
Streets with a mix of houses, three-storey apartments next to Edwardian or Victorian detached houses, are less likely to attract buyers with such different styles. It is reported that around 97% of housing buyers live in Australia and over 74% of buyers are either first-time buyers or owner-occupiers who are changing homes. Australia's population has grown by 1.5 per cent, the highest in the developed countries and the market has been supported by high demand and low supply of housing. Especially in Sydney and Melbourne.
Low-interest rates have allowed more people to afford homes, reduce debt and increase disposable income.
Mark Steinert, President of Stockland, predicted that in Sydney, Melbourne and Brisbane, house prices are going up for the next 3 to 10 years.
He pointed out that there are three key indicators to judge the health of the property market: supply, employment and interest rates.
Economist Dr Wilson agrees with these three key indicators, stating that overbuilding, economic collapse or interest rates going up all has an effect on the market, usually, they all come together. But for the next five years, he won't see any of that happening.
The level of population growth is also very high, about 1.5% a year or more, and Dr Wilson says this will continue for the foreseeable future Support the continued development of million-dollar-plus properties in Sydney and Melbourne.
In addition, he predicts that in the next decade, the landscape within 800 meters of the train station will change dramatically.
Unlike markets such as stocks and gold, houses are less liquid, have longer investment cycles and are less standardised. Choosing a property to invest in takes a lot of effort and time, whether it's a first time home buyer or an investment purchase, hopefully, this information will help.