The Melbourne property market has been red-hot for the past few years now. With plenty of urban developments being undertaken across all corners of the city’s metro region, now is the perfect time to buy into one of Melbourne’s growth suburbs and build equity on your first home.
That being said, there’s no denying that entering the real estate scene requires a fair bit of strategic planning – especially for first-time homebuyers. So what do you need to know in order to give yourself an edge and increase your chances of being the winning bidder at your next auction?
Today, we’ll outline some of the top considerations prospective homebuyers will need to make when purchasing properties across Melbourne. Read on to learn how to snag a little piece of Melbourne while the sales are on.
Get your finances in order
Of course, the first thing you should hope to do when preparing to buy Melbourne property anywhere is to just organise your finances and establish a set buyer’s budget. Many first-home buyers opt for fixed rate home loans as their consistent monthly repayments provide a solid segue from traditional rental rates to the changeable nature of mortgage repayments.
That being said, there are some notable financial advantages to securing a variable-rate home loan, as long as interest rates remain stable. For instance, variable-rate home loans provide homeowners with additional financial features or services, including the opportunity to a redraw facility that lets you access any extra payments (payments made over your minimum monthly repayments).
Alongside deciding between fixed and variable loan rates, buyers are also encouraged to assess their savings or the equity on any existing properties in order to determine whether they have enough for a 20% initial deposit. Cobbling together a 20% deposit can help you avoid having to pay the additional LMI (lender’s mortgage insurance) fee on your next mortgage.
Do some Melbourne property market research
Once you’ve got a clear understanding of your borrowing power, the next thing you’ll want to do is decide whether now is the right time for you to buy. Just because you’ve been pre-approved for a loan, it doesn’t mean that you have to be ready to make an offer on a Melbourne property straight away. If the timing isn’t entirely right for any reason, then take time to reassess.
If the timing is right, however, you will know for certain by conducting a bit of independent market research. This involves monitoring property prices in suburbs or regions that pique your interest as a buyer, as well as keeping a close eye on the rise and fall of the RBA’s interest rates. Once you’ve been able to observe steady Melbourne property valuations, ideal rates, and adequate market opportunities, you’ll know it’s time to make your move. Literally!
Find your favourite suburbs
It’s increasingly common for buyers to adopt a long-term approach when entering the property market nowadays. Sometimes it really does pay to wait for the right opportunity rather than settling for a good deal in a less-than-desirable location or for a property that’s smaller than what you would’ve preferred.
This is especially true in Melbourne, as the city is witnessing a slew of apartment, unit, and townhouse developments across a growing number of inner suburbs. Whilst these developments do make these suburbs more accessible to low-income residents and first home buyers, they are usually accompanied by smaller property sizes and perhaps even fewer features compared to larger properties in Melbourne’s outer suburbs.
If you want to live in a particular region or neighbourhood, however, then that should be taken into consideration when you are looking for Melbourne properties. Want to live in Brunswick because that’s where you lived when you first moved out of your home? Then set up a notification alert for any properties listed in Brunswick that align with your budget and size requirements. And just continue this process with all your favourite suburbs to maximise your chances of stumbling across a golden opportunity.
By adopting a long-term approach and continuing to save diligently, there’s no reason why you can’t buy property in your favourite suburbs across Melbourne.
Attend plenty of open houses and auctions
Finally, even if you are ready to buy now and have a few auctions lined up, there’s still no guarantee that you will walk away as the winning bidder. The property market can be cutthroat, and Melbourne is no exception here. You will be bidding against other motivated buyers at virtually every auction you attend, so it’s well worth familiarising yourself with the unique environment that is a property auction well before you attend one as a bidder yourself.
Study hard. Use your Saturday afternoons to drive around your favourite Melbourne suburbs in order to watch auctions as they happen. That way, you can get to grips with the tricks used by auctioneers and real estate agents in order to get prospective buyers to go over their spending limits. Learn how to identify these tactics and how to shut them down on your own terms. By developing this ability, you can present yourself as a competent and surefooted bidder who’s not to be trifled with. And you’d be surprised by how impactful your attitude can actually be!
Another benefit of attending lots of auctions is just being able to explore open houses or property inspections wherever and whenever they’re available to you. There’s a lot to look out for when it comes to inspecting a property, so it goes without saying that participating in plenty of inspections can help to hone your eye.
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We’re halfway through 2023 now and interest rates are likely to decrease nearing the end of the year. That means that many of you Melbourne renters or owner-occupiers who are looking to enter the property market as prospective buyers could very well find plenty of opportunities over the next financial year. So bone up on your real estate knowledge, and start house hunting with purpose. You may just find yourself a fresh homeowner by the end of this year!
Be sure to keep up with our Melbourne news at Around Melbourne.
