Buying your first home ain’t what it once was. Gone are the days of buying your forever home at 21 and promptly popping out a gaggle of middle class children within 18 months. Times have changed, prices have risen, and well, avocado on toast got cool and ruined all of our chances of ever having enough room for activities.
Kidding – we’ll get there one day, but the landscape of first homeownership is changing. Today, we caught up with Melbourne buyers advocate Kristy Caskey from The Property Bureau. I picked Kristy’s brain on where young people are going wrong and how we can make logical first home decisions to set us up for the future.
The Broke Generation: Hi Kristy! Thank you so much for being a part of our interview series. We’re keen to get our paws on your property market smarts and understand how we can realistically ever own property!
Kristy Caskey from The Property Bureau: Hi Emma, it’s great to be able to help people buy property especially younger buyers as we know how hard it can be out there! The Property Bureau works with buyers to select top quality property for home or investment and coordinates the purchase for the best possible price. We even do the bidding at auction!
The Broke Generation: Okay. Let’s get into it! Lots of young people nowadays feel like they’ll never own a home. Why do you think this is?
Kristy: For the last few years the market has been quite strong and favoring sellers. This year we have seen a noticeable slow down on financial institutions lending to investors which has left a fantastic opening for first homebuyers to get into the market with less competition from investors. It’s a really welcome change!
TBG: Where do you think young people are going wrong when it comes to buying their first home (or not)? Are we not saving enough? Do we not understand the market? Is the media churning out scaremongering stories telling us we’ll be living in rented sheds forever?
Kristy: From our experience we have seen first home buyers overlook quality properties for cosmetic reasons. Our goal is to educate our clients during the buying process and part of that education is being able to spot an ‘ugly duckling’ property that has amazing potential rather than being swayed by flashier properties that hold little growth potential. We see the first home purchase as a great stepping stone to help get towards the dream home.
TBG: What’s your view on rentvesting?
Kristy: We think rentvesting has some fantastic fundamentals if done properly. You don’t have to give up your lifestyle in terms of living close to the things you love but you can get your money working in the property market. The key is to take all emotion from the selection process and think purely about long term growth.
TBG: Buying property is different to the way things were 30 years ago, right? Our parents and grandparents bought homes young, and those homes were big enough and convenient enough to raise a family and live in for decades. Do you think this traditional way of buying property is perhaps freaking younger generations out?
Kristy: I think buyers these days aren’t as daunted in taking out a mortgage and see their first purchase as medium term rather than a forever home. Buying property is a popular topic among most generations and everyone has a well meaning friend or family member who likes to give advice (some good, some not!) So it is always best to get some professional help with one of the largest financial decisions you will make.
TBG: Do you have any insider tips on buying your first home?
Kristy: The most important thing we advise our first home buyer clients is to lower expectations and see their first purchase as a stepping stone. A good analogy is your first car, probably not a flash European car but something to get you from A to B. Your first property might not be too pretty, but you will love it all the same because it’s your first. If you get the first purchase right, you can work up to the Ferrari!
TBG: Should young people max out as big a mortgage as they can get just to lock in a first home? Or are smaller, more manageable mortgages the way to go, even if it means not buying your forever home?
Kristy: When you’re young you want to be able to have a lifestyle you want, so a big mortgage could compromise this. We recommend you don’t overcommit and run the risk of default or having to sell too soon. Ideally you want to be able to hold the property for 10+ years to maximize the compounding effect of capital growth or even better, hold the property forever as an investment property once you’re upsized.
TBG: What should young people be looking for in a first home?
Kristy: Land value is the driver for capital growth, so buying a house or apartment with a good proportion of land encompassed within the purchase price. Apartments have a notional land value component eg a block of 12 apartments, you own approx 1/12 of the total land. Older style apartments with fewer numbers of apartments on the land are the way to go if you can’t afford a house. Quiet streets with easy access to shops/public transport and car parking on title are winners.
TBG: How can buyers advocates help young people with their first home purchase?
Kristy: Buyers advocates are a valuable resource when buying a property because we can easily spot a quality property, do all the research on growth/value and coordinate the purchase to minimize stress for our client. We have access to off market properties and know which suburbs/streets are undervalued. The Property Bureau ensures the client is comfortable and educated throughout the process. Our fees will well and truly pay for themselves in the top-quality asset selection and negotiations. No question is too silly to ask us as we’ve been through this hundreds of times before and understand it can be quite daunting!
Kristy, thank you so much for chatting to us! Your advice is super valuable and answers a lot of big questions the younger generation has about home buying.
You can find The Property Bureau on Facebook and Instagram dishing out handy videos and breaking down the property buying process into easy-to-understand chunks. If you’re finding buying your first home more complex than finding love on Tinder, consider the help of a buyers advocate to help you make future proof real estate decisions.