Advice for First Home. What Would You Do?

J4Jayden on 12/05/2020 - 13:28
Last edited 12/05/2020 - 14:26

Hi Everyone!

First of all, I know I can go to a real estate but I am just worried that I might not get the real deal advice like I can here. I trust real people feedback and advice more than a business.

I am looking at getting into an apartment under 250000 with 5% deposit and LMI. I have been renting for about 9 years now. I am an immigrant so don't really have the option for a guarantor.

The questions is, is it worth getting into an apartment or should I keep saving for another year and maybe get a place about 40-45 minutes drive west of Melbourne CBD with it's own little piece of land?

I just really want a place for myself. I am sick of moving every year and paying rent.

Thank you for taking the time out and providing me some insights.

Edit: I do have about 15% saved up I am keeping the other 10% for emergencies & to support the business that I have. Maybe it's just better if I keep renting and keep saving more.

Home & Garden

Comments

  • kolorijo on 12/05/2020 - 13:39
    +29

    Personally I would wait for a couple more years.

    • boozler on 13/05/2020 - 14:17
      +11

      Yep, and wait a few more years after those couple years, and on and so on….

    • nobro25 on 13/05/2020 - 17:59
      +3

      Not trying to bag on your comment but is there any personal or explicit reason why you wouldn't buy now? Do you have some sort of a reliable source or are you simply going on a hunch on the current property market?

      • hypie on 14/05/2020 - 09:05
        +2

        https://www.abc.net.au/radio/programs/worldtoday/cba-flags-3…

        The banks. All of them.

        • capslock on 14/05/2020 - 09:29
          +7

          Anybody who thinks that house prices will drop 32% should sell their houses now and buy it back when it is 32% cheaper. Is anyone here willing to take that gamble?

          I don't think anyone really expects house prices to drop anywhere near 32%. I certainly wouldn't be waiting for that 32% price drop if I needed to buy a house.

          • cameldownunder on 14/05/2020 - 10:40
            +3

            @capslock: Our house "Went up" by more than 100% in 7 years, and is possibly going down "30%" in the next year, but strange thing is that it has not gotten bigger nor smaller, nor has the garden become bigger or smaller, and the house has not changed place either, and the view is still the same.
            As out house is not an investment, it does not really matter to me what others would pay for it.
            But I agree with @capslock, if you own an investment property and you are afraid it might lose 30% then you should sell, not because of the 30% decline, but for the fact that you are afraid.

          • od810 on 15/05/2020 - 09:22

            @capslock: You lose out about 6-8% instantly from buying and selling. There will be certain bracket & pocket of homes lose a lot of value. Multi millions dollar home will drop about that much. I remember during GFC, Toorak homes drop about 30%. But I agree, broad market drop of 32% would be a bit drastic. However, i'm ready to prepare the cash in case the drop happen. I know it sounds like an arsehole, but it's an event once every 10 years for you to get rich :).

      • kolorijo on 14/05/2020 - 13:46
        +1

        That's just my personal opinion based on my own experience when GFC hit in 2008. I waited 2 years before plunging into the housing market in 2010.
        I have no scientific data to back up my previous statement.

        • [Deactivated] on 14/05/2020 - 19:29
          +1

          LOL
          you should have consulted me before making any statement

    • Zondor on 14/05/2020 - 15:41
      +1

      People have been saying this for 10 years.

    • sempro on 15/05/2020 - 15:06

      I agree, keep saving.

  • SnowDragon on 12/05/2020 - 13:44
    +11

    Firstly you should get the biggest deposit you can. Although 5% deposit is accessible for a lot of people, you would put yourself in a better position waiting a year and saving another 5%. Look up an amortization table and compare your deposit amounts. See how much you'd be paying off the principle with a 5% deposit and then a 10% deposit.

    Secondly think about the long term. Do you want to be in an apartment in 10 years or a house with some land? Each has their pros and cons of course.

  • GG57 on 12/05/2020 - 13:45
    +9

    Not much has changed since you posted this: https://www.ozbargain.com.au/node/437732
    Except you want a larger mortgage now.

    • geoffs87 on 13/05/2020 - 10:30
      +10

      prices went up… cost of procrastinating!

    • Kill Joy on 13/05/2020 - 21:14
      +3

      Whoa 85k after tax and still only has 5% a year later?

    • Scythic on 14/05/2020 - 01:47
      +4

      I don't get it. How hard is it to save 5% of 250k?

      I am an immigrant too. I came to Australia 9 years ago as a student. I'm single and I make less money than the OP's claim. But with saving over the years, I managed to buy my first home (30 mins drive from Melbourne CBD) at about $520k. I put down 20% deposit to avoid LMI and planned to pay it off in 15 years.

      • ebayer007 on 14/05/2020 - 10:17
        +3

        Agree - sounds like a troll post to me. Who looks for 250k apartment when someone is earning $85k after tax - that is around $110-130k before-tax income. In 9 years OP has managed to save 5% of $250k?

      • cameldownunder on 14/05/2020 - 10:42
        -6

        Maybe you did it with some help from your "overseas" parent who paid for your university fees, and financial support for the deposit?

        • Scythic on 14/05/2020 - 10:49
          +5

          My mum is a widow and I have six siblings. Yes I received helps when I first came to Australia, my parents paid my uni fees, shared rent with my sister etc. I worked part-time during my uni years (fruit store, restaurants, mentoring students)
          As soon as I got my first professional job, I started helping my younger siblings with uni fees as my dad passed away. I'm still paying half of my youngest brother's uni fees. He's doing Master of Business.
          My mum did offer to help me with deposit but I refused as I wanted to be independent

          Edit: Btw I didn't neg your comment. I think that's a valid question. I know many people got their assets from wealthy overseas parents. But sadly, I'm not that fortunate

          • MechEng on 14/05/2020 - 15:15
            +2

            @Scythic: At some point is our lives we all rely on our family, do not be ashamed of that, and do not ever let anyone make you feel bad about it.
            Good on your parents for providing a good education to you (and hopefully to your siblings too), I hope I would be able to do the same for my kids.
            If your parents helped you or not is not relevant to the point, as you still had to save for the deposit. If someone thinks that having a HECS (paid at a very low interest rate) is the only reason for not being able to save for a deposit need a reality check.
            Keep up the good work, this country is full of opportunities!

            • Scythic on 14/05/2020 - 15:26
              +1

              @MechEng: I agree with you. I'm aware of HECS - at the time me and my older sisters doing uni courses here, we weren't qualified as we weren't citizen. So paying full fees was the only option. But I'm glad we're not in debt

              I still remember when my Aussie friend in uni saw my semester invoice. He was shocked as my invoice is 3-4 times higher than his.

  • kahn on 12/05/2020 - 13:48
    +80

    Ozbargain is comprised of 90% landlords, so you will be advised to keep paying rent and be quick about it.

    • mskeggs on 12/05/2020 - 18:20
      +38

      And don't forget to tip your landlord!

    • strike1 on 13/05/2020 - 20:49
      +1

      Haha! It seemed so, in the fiery exchanges on a discussion about "rent reduction" due to Covid-19 :)

  • MrHyde on 12/05/2020 - 13:53
    +11

    Apartment vs House really is a personal preference, especially if you are looking for it as a place to live.

    I bought an apartment to live in as it suits my lifestyle - walking distance to the city; so no long commute every day. Small area; so not much to clean and look after. Cons, value does not increase by much; strata levies and fees…

    But I've been in my apartment for 20 years now and the value from living there as more than made up for the cons.

    • dcep on 12/05/2020 - 17:03
      +3

      curious how much is your strata .. 20 yrs then and now?

      • MrHyde on 12/05/2020 - 18:18
        +13

        Quite a lot. Currently around $2000 per quarter. When I first moved in, it was about $700 a quarter.

        • ToTheMoon on 13/05/2020 - 12:28

          what building facilities do you have? like pool, meeting room, wine cabinet, car park…

          • MrHyde on 13/05/2020 - 13:49
            +6

            @ToTheMoon: Swimming Pool, sauna, spa, tennis court, gym, car spot

            No movie theatres, meeting rooms, party rooms that many of the new buildings have.

  • dasher86 on 12/05/2020 - 13:53
    +3

    https://www.ozbargain.com.au/node/437732#comment-6945905
    Still stands.
    it's been more than a year and you haven't managed to save more than 5% of 250k on an after tax salary of 85k?
    Dude what are you spending your money on?

    • kerfuffle on 12/05/2020 - 13:56
      +5

      Going to Vietnam

      There's also a post about going to Uluru

      • dasher86 on 12/05/2020 - 13:57

        what about an Audi S3?
        Or vietnam

        • capslock on 12/05/2020 - 14:01

          Vietnam's been postponed though. Was going to be replaced with a camping trip to Uluru.

          • J4Jayden on 12/05/2020 - 14:18
            +6

            @capslock: Fair observation. I do have money saved up but I am keeping it for other things. Like emergencies.

            Taking one holiday a year is I think not a luxury. Vietnam never happened so I took the Alice SPrings holidays.

            To answer if I have more money saved up or not, I do have it but I inject it into my business (a post about that too here).

            You know how they say you can buy a house from a business but not a business from a house? I could be wrong though.

            S3 is on sale as the broker suggested I minimize my Debt.

            Happy to clarify anything here. I felt a bit attacked at first but then realized they are all fair observations.

            • Hybroid on 12/05/2020 - 14:26
              +14

              @J4Jayden:

              Taking one holiday a year is I think not a luxury.

              There's absolutely nothing wrong with going on holiday, but it is absolutely an unnecessary luxury. Many people don't go on holidays or can't afford to and survive just fine. It's a luxury.

              • J4Jayden on 12/05/2020 - 14:28
                +6

                @Hybroid: I guess maybe that's right. But to keep psychologically sane after working 9 to 5 Monday to Friday I thought I really needed a break. Although, I am def not contesting that it's unnecessary.

                • dasher86 on 12/05/2020 - 16:16
                  +4

                  @J4Jayden: I'm not saying it's not good to have a holiday.

                  But 5% of $250k is not a big task in a year

                  Your income is probably greater than that of many and cudos for an emergency fund.

                  As I said one bedroom apartment you will grow out of it pretty quick.

                  2 bedroom apartment if you're into apartments.

                  town home is what most home buyers aim for inner city
                  outer city a house.

                  Ideally it is up to you how you want to balance your lifestyle.

                  So maybe tell us what you enjoy and what areas you like living in.
                  Then from there you can analyse what's most important to you.

                • Typical16-bitEnjoyer on 12/05/2020 - 18:46
                  +4

                  @J4Jayden: Sometimes the best break or holiday you can have is right at home….with the phone switched off :)

            • Brick Tamland on 13/05/2020 - 10:37
              +1

              @J4Jayden: To me taking one holiday per year is probably the definition of a luxury lifestyle. The last time I had a holiday that wasn't simply a long weekend away was 4 years ago.

              Knuckle down, stop going on holiday, don't buy luxury cars and you will get that a good deposit together.

            • EnALup on 13/05/2020 - 16:08
              +6

              @J4Jayden: I like how people judge you taking holidays or other items. Different people have different priorities and taking holidays for one might be a good change from work and for other it will be a waste of money.

              Take these advises with grain of salt. Looks like people are spending more time researching OP's history and making judgements rather than answering his question.

              • Kill Joy on 13/05/2020 - 21:16

                @EnALup: I think the feedback is very fair. Hes asking advice on buying an apartment - with his salary he would be able to if he didnt spend on luxuries for 1-2 years. It's just advice not a demand.

            • cameldownunder on 14/05/2020 - 10:43

              @J4Jayden:

              Taking one holiday a year is I think not a luxury.

              Holiday is always a luxury. Heck, taking time off is a luxury. Get your Holidays paid out !

            • Bryanalves on 14/05/2020 - 15:58

              @J4Jayden: Get an apartment in maribyrnong

    • JimmyF on 12/05/2020 - 14:07
      -4

      seems to be a string of poor choices to spend the money on, rather than save for a place to live in.

      • J4Jayden on 12/05/2020 - 14:20
        +1

        Hey look we all make poor choices. I probably didn't have someone over-seeing me with my financial choices but I would say I am on the right path now!

        • JimmyF on 12/05/2020 - 15:18
          -1

          I never had anyone looking over my shoulder either, but I was aware of the need to save money if I wanted to buy a house. But things you had been told 14 months ago, and it appears you haven't really increased your savings in that time frame.

          • J4Jayden on 12/05/2020 - 15:47
            +1

            @JimmyF: It appears yes but not correct. My savings increased. I just put more into my business. I just want to keep some money for emergencies. DOn't want to put all of it into the house and then not have anything for emergencies.

            • Kangal on 12/05/2020 - 19:00

              @J4Jayden: What do you do for work? Do you run a Cafe?

    • plmko on 12/05/2020 - 14:19

      *edit

      Fair points OP

      But I think the general consensus is you need to save some more.

    • boretentsu on 14/05/2020 - 10:16

      Follow the treasurers advice and just get a better job that pays better money.

  • JimmyF on 12/05/2020 - 14:06

    I am looking at getting into an apartment under 250000 with 5% deposit and LMI.

    Sorry its a simple as this…… you won't get a loan.

    In the current market and prices set to fall anything from 10-30% in some areas, banks are laughing at anyone who wants a LVR over 80%.

    Sorry, I don't make the rules.

    • popsiee on 12/05/2020 - 14:12
      +1

      The trend of running away from apartments is going to escalate to my range of 20% - 50 % lower .
      Great investment !

      • JimmyF on 12/05/2020 - 15:18

        Great investment

        After they crash 50% maybe, but not if you own one of these silly things!

        :)

        • BestofOZB on 13/05/2020 - 12:21
          +3

          50%? What are you smoking?

          • Ler0y007 on 13/05/2020 - 18:10
            +2

            @BestofOZB: Minimum 50% in Victoria.

          • JimmyF on 13/05/2020 - 18:54
            -1

            @BestofOZB:

            50%? What are you smoking?

            Read the thread and you'll understand.

    • dasher86 on 12/05/2020 - 16:18
      +2

      OP after tax income is $85k+ ~$120k pa.
      No problems from income just deposit.

        • J4Jayden on 13/05/2020 - 09:40
          +24

          I am pretty okay with all the criticism but this is def personal attach "WOW, way to go op, banking $166/month in savings over that time out of your ~$7,000 monthly take home pay."

          I have a business in it's first year that takes about a grand in marketing a month and about the same in operational costs without giving much back. It's in the early stages but just like any other business will pick up and pay me back. You don't know my entire situation so making a remark like that tells me you yourself are a bit insecure. Maybe the way you talk is a self-reflection of who you are?

          Are you 15 year old by any chance? Why is it so hard for you to be able to make a point without being extremely rude? I know it's the internet and no-one knows who you are or who I am but seems like you enjoy being a bit rude. Me pointing it out wont change your behavior but you definitely need some self reflection.

          I asked for advice and I am very open to hard criticism but you seem very ill-equipped with your conversation style.

          With that, you are welcome to keep your comments to yourself if you can't put your point forward in a more civil way.

            • curious101 on 13/05/2020 - 11:40
              +5

              @JimmyF: Although you do have some facts here Jimmy. Use of terms like like these are not necessary "WOW, way to go op", "hahahahhaha got a bit of butt hurt going there I see", and you don't have to rub it in or go in all savage on the OP, have some chill bud :)

              • JimmyF on 13/05/2020 - 11:52
                -7

                @curious101:

                Use of terms like is not necessary "WOW, way to go op",

                Oh life is going to be so much harder once you you both leave the parents nest, the OP/you is going to have to toughen up a bit if you are offended by that.

                "hahahahhaha got a bit of butt hurt going there I see", and you don't have to rub it in or judge the OP.

                My judgement as you put it only came after the OP came crying and saying it was a personal attack by pointing out they only managed to save $166/m of their $7000 clear income over the last 15 months and they called me a 15 year old. Yep sounds like someone has a bit of butt hurt going on there.

                Fact this is the 2nd time in 15 months the OP has asked the SAME QUESTION, and yet nothing was learned or changed from the last time they asked it.

                ¯\_(ツ)_/¯

            • exp1 on 13/05/2020 - 16:59
              +3

              @JimmyF: Immature, low EQ response that adds no value to answering the OP's question.

              Stick to answering the question, not questioning the OP's broader personal circumstances that you do not have complete visibility of.

              • JimmyF on 13/05/2020 - 17:38
                -5

                @exp1:

                Stick to answering the question,

                Cast your eyes above, the OPs question has been answered with reasons and details why they won't get a loan. So try again.

                not questioning the OP's broader personal circumstances

                What the? This thread is a question on the OP borrowing money with only a 5%/$12.5k deposit needing a loan LVR of 95%, I think I can question the OP poor saving habits over the last 15 months as as part of answering the question. The OP asked the same question 15 months ago, but 15 months ago had $10k saved up, now roll on 15 months later CLEARING $85k/year they have only managed to save a extra $2.5k. hahaha sure sure, better not question that at all.

                Immature, low EQ response that adds no value to answering the OP's question.

                and yet your reply added no value to this thread, but yet here we are reading it as you felt the need to post it, the same with mine. If you don't like it, vote on it and MOVE ON.

                Anyhow, I look forward to the next thread in 12-18 months time by the OP saying the same thing, but for a $300k place with 5% deposit.

        • cameldownunder on 14/05/2020 - 11:01

          Banking $166/month in savings over that time out of your ~$7,000 monthly take home pay.

          Bit harsh, but true.

          The response indicates immaturity. Wonder how and where OP got a 125K salary position with that attitude.

          • JimmyF on 14/05/2020 - 11:16

            @cameldownunder:

            Bit harsh, but true.

            Don't disagree at all, but the truth is rarely kind or what most people want to hear. I'm not here to sugar coat the world for the OP, they have been earning $125k/yr, and only managed to say $2500 in 15 months.

            The other harsh truth is, in this current lending climate with covid-19, no one (not just the OP) is getting loans of 95% LVR approved. Lots of people are struggling with 80% LVR and even 70% LVR.

            • cameldownunder on 14/05/2020 - 12:01
              +1

              @JimmyF:

              but the truth is rarely kind or what most people want to hear.

              Agree

              I feel for all those people with a 3% 500K mortgage that have lost their job. I feel for all those people who have lost their job.
              It just shows that job security can be a huge factor when deciding what career and job to take.

        • Heaps for Cheaps on 14/05/2020 - 12:52

          I agree that the way you come across is abrasive. You probably have noticed the same thing in your real life interactions.

          Either you don't know you come across this way, in which you lack self-awareness or I figure you're taking pride in it.

          Tip for anyone dealing with such personality traits. Avoid them as they will turn it around and pretend that everyone else is the problem.

          • JimmyF on 14/05/2020 - 14:18

            @Heaps for Cheaps:

            I agree that the way you come across is abrasive.

            Why should anyone be sugar coating it for the OP. We're NOT their friend, nor do I want to be. I have enough of my own thanks.

            You might call it abrasive, sure but this is the 2nd time the OP has asked the same question and they didn't learn a single thing from the first time round in asking. So time for some hard truths, as abrasive as it might be.

            So I'm a bad person for pointing out the OP crap saving record. Oh boo hoo, don't want to hurt the OPs feeling hey? Why blow smoke up their arse, the harsh truth is they haven't saved well and they won't get a loan in todays market. From the last time they asked, being 15 months ago. They had been told to buckle down and save some money. Did they? I guess they did, $2500 saved in 15 months on a $125k salary. Hmmmmm

            Sure I'm abrasive, the world is tough, but wait till the OP rocks up at a bank asking for a loan. The bank isn't going to go oh don't want to hurt the OP feelings, here have some money. Nope they'll tell the OP to bugger off and learn to save.

            The market has changed with covid-19, LVR over 80% are not being approved, unless you have something to secure the loan with (other than the place you're buying).

    • Ciderfizz44 on 13/05/2020 - 12:10
      +1

      ^ to add to this especially if the apartment is under 50 sqm & good luck finding anything larger than 50 sqm in that price bracket OP. Save more, rent a single room in a shared house somewhere in the burbs for another year or two. Squirrel away, every dollar counts!

  • [Deactivated] on 12/05/2020 - 14:21

    I would recommend getting a property. We are in a unique situation now and prices will pick up faster than your savings ability. There's never going to be a "good time to buy"

    However, you won't get a mortgage for 95% of a first time property.

    Based on your numbers, you have around $12k. If you are looking at the CBD perhaps adjust your expectations to a studio (from about $160k) or else an apartment outside of the city, affordable options in places of Burwood.

    • kerfuffle on 12/05/2020 - 14:49

      OP's in Melbourne. Unless you mean Burwood, Victoria …

      Edit: Why did I get negged for this (unless you're one of my haters)? There's a Burwood in NSW and the commenter was in NSW. Highly unlikely that they bothered looking at the OP's profile and saw they were based in Victoria.

      • Ghost47 on 12/05/2020 - 17:04
        +1

        Didn't neg you, but the OP said they're in Melbourne.

        There is a Burwood in Melbourne, it's possible CashelsOnTheCase may know that too, hence the suggestion.

        Highly unlikely that they bothered looking at the OP's profile and saw they were based in Victoria.

        Why do you say that? I'd think most people would check the contact card to see where someone is based if they say they want to buy a house, unless of course they mentioned it in the OP (which OP did do).

        • kerfuffle on 12/05/2020 - 17:31

          I know there's a Burwood in Melbourne, thanks, hence my Burwood, Victoria comment. Not all OzBargainers are aware that there's a Burwood (or Epping or Fairfield) in both Victoria and NSW, or even bother doing research before commenting or posting (going by what I've seen on here). The fact that a NSW person was commenting on the Victorian housing market sounded like they were talking about Burwood NSW (where there's a lot of apartments).

          • Ghost47 on 12/05/2020 - 18:03

            @kerfuffle:

            The fact that a NSW person was commenting on the Victorian housing market sounded like they were talking about Burwood NSW (where there's a lot of apartments).

            Fair enough, it seems the OP did edit the original comment so it's possible they left out that fact, whch is why CashelsOnTheChase may have meant Burwood NSW.

  • Serathis on 12/05/2020 - 14:26
    +2

    95% during this period is gonna be tough, not many banks will be willing to take that risk unless your occupation is part of the essential services

    • JimmyF on 12/05/2020 - 15:19
      -1

      unless your occupation is part of the essential services

      Even then you'll be pushing it up hill.

    • cameldownunder on 14/05/2020 - 12:12
      +1

      Also it would be 95% of the sale price. Conservative banks overseas lend you money based on their real estate valutation, which is about 20% less than sale price
      e.g. House 500K, Bank Evaluation 400K mac bank is giving is 80% of 400K = 320K
      The buyer has to couch up the remaining 180K. The same banks also reuire you to bay mortgage back to 66% as quickly as possible.
      On top of that they still calculate repayments with a 5% interest, not exceeding 1/3 of your net income.
      in case above 320K @ 5% = 16K interest. 30 years repayment time = 10K total = 26K
      Any net salary below 78K yearly would have such an application refused.

  • J4Jayden on 12/05/2020 - 14:35
    +22

    Well, cheers everyone! Looks like I need to be more sane financially. Keep saving, squeeze my butt cheeks and give up on tiny luxuries if I want to really get into the market.

    Fair call that I did make a few stupid financial decisions to get short time luxuries. Although, that being said I am on track to be financially better! I think most, if not everyone makes these silly choices.

    Coming from no luxuries, it just felt kinda nice having nice things in the beginning. You know, nice car a nice holiday and shit like that. So yeah, fair observations.

    I will keep saving and bother you all again! Then you can go back to my OzBargain history and give me a hard chat again haha! thanks

    • Serathis on 12/05/2020 - 16:00

      mate, i feel you lol. I have 2 properties and no car. I can't justify having a car when I know its an expenditure I dont need but would love to have. Public transport while I save till I have to, one day lol

    • [Deactivated] on 13/05/2020 - 15:59
      +6

      Saving up for a mortgage deposit is painful. Paying off a mortgage effectively requires you to be thrifty. But that's the harsh reality of life.

      When I was saving up for a mortgage deposit, and was earning just under $100K/year, I did the following:
      - My car was a cheap Toyota that I bought for less than $10K. I've now had it for 14 years, and I'll keep it until the wheels fall off. Cars are a massive money sink. Buy a basic, but reliable one and keep it for a decade or more.
      - No holidays at all. Just camping weekends.
      - No eating out. Maybe takeout once a month, but anything more than $20 is out. Just cook at home, using whatever is on sale in the produce section. Most weeks our food and grocery bills were under $100.
      - A discretionary spending budget of under $500/month. This includes takeout, coffee, lunches, computer parts, clothes, entertainment, etc. That $500 covered all discretionary spending for both my wife and I. Most of the time we actually spent a fraction of that and banked it for when we wanted a bigger-ticket item like a phone or laptop.
      - The cheapest possible accommodation that's livable. Even if that means a quite a commute. I commuted for 15 minutes by car, then more than an hour on the train, then another 15 minutes walk. All the more incentive to save that deposit faster.

      Once you've removed any unnecessary expenses, just stick with it and save for a couple of years. You'll get a decent deposit faster than you expect, and you'll develop thrifty habits that help you pay off the mortgage faster too.

    • cameldownunder on 14/05/2020 - 12:13

      See you in 1 year. Please with more than 5% deposit.

  • Gnostikos on 12/05/2020 - 14:36
    +3

    You want to buy an extra cheap, brand-new apartment for your first home?

    Have you not seen the countless number of scandals involving brand-new apartment buildings all across Australia built with catastrophic building defects and incredibly poor quality fit-outs?

    You couldn't pay me to live in any apartment built in the last 15 years. They're literally death traps and money pits with a layer of bureaucratic red-tape from strata management/owners corp that'll make you want to swan-dive from your balcony every time you make a minor request to fix an incredibly obvious issue that they're liable for or an issue that wasn't picked up during the building defects phase (of which there will be literally hundreds).

    Buying new apartments is the worst of both worlds of renting and home ownership; it's combines all of the aspects of renting you dislike the most (having to rely on an incredibly unresponsive and financially-demotivated party to fix issues along with being subject to all sorts of rules and restrictions regarding what you're allowed to do in your own home and how you're allowed to modify it) and all of the long-term negatives of home ownership (virtually zero resale value, depreciates like a boulder off a cliff, disproportionately high ongoing maintenance expenses compared to the initial cost, etc.)

  • netjock on 12/05/2020 - 15:25

    I am looking at getting into an apartment under 250000 with 5% deposit and LMI. I have been renting for about 9 years now. I am an immigrant so don't really have the option for a guarantor.

    5% deposit might be hard to make happen. You need 40sqm floor space otherwise you are going to be stuck with CBA which is more expensive rates. Some buildings are on restricted lending lists because the bank is already owning most of the building. You'd be best off speaking to a mortgage broker and get them to find out if the buildings you are looking at are on the restricted lending list.

    The questions is, is it worth getting into an apartment or should I keep saving for another year and maybe get a place about 40-45 minutes drive west of Melbourne CBD with it's own little piece of land?

    We talking about 400k house and land packages? It depends. If you don't work in the CBD then you're okay.

    • Maxdax on 13/05/2020 - 19:11

      one of my mates got CBA @ 2.19% on 90% LVR - 1 year fixed rate loan. He didn't needed a variable loan OR offset OR redraw in the first year so it suits him and also the variable was way higher than 2.19% - I say not a bad rate with a BIG4!

      I doubt CBA will do under 40Sqm with LMI as well

  • Realsteel on 12/05/2020 - 15:34
    +1

    Good luck with the savings plan. Keep at it and you will get there and don't be too hard on yourself. We all would do certain things differently if given another chance. That is life - we live and learn.

    Out of interest, how was your trip to Alice Springs - would you recommend the drive?

    • J4Jayden on 12/05/2020 - 16:02

      It was great! I needed it after going thru something in my personal life. The drive was good. Wouldn't do it in anything but a 4x4 though.

  • J4Jayden on 12/05/2020 - 16:29
    +3

    riginal comment: But seriously! HOLY LORD!!!

    I just looked at all the things I can offload and I could potentially get another 6-7k easy. I blame OZB deals.

    I just listed stuff on Facebook Marketplace! I needed this harsh criticism.

  • miwahni on 12/05/2020 - 21:54
    +1

    Good on you for having savings and a plan. One note of concern - you mention having money to put into your business. Are you earning your income on a self employed basis from your own business? Just yesterday Westpac (including Bank SA, Bank of Melbourne and St.George) tightened up its LVRs for self employed borrowers (except for Medico sector), with a max 80% and you can almost guarantee the other majors will follow suit.

    • J4Jayden on 13/05/2020 - 09:42
      +1

      I earn from a full-time job and inject money into my business.

      Its just the start of 2nd year of my business. It's a t-shirt store where I design all my designs. It has just started getting traction. Organic traffic from google has kicked in and I can stoop spending about a grand a month in marketing. I am hoping this year the business will pay me back for all the money I spent on it in the past year.

      • saltypete on 13/05/2020 - 10:04
        +1

        Land tends to increase in value with time and buildings decrease. That’s why landlords get depreciation. Strata fees are generally attached to apartments. A house on land in a good location, in a good location. A good location would be my aim with as much deposit as you can pull together.
        Save and wait for a while. There are going to me some changes in thinking and lifestyle decisions post lurgy and I have a feeling that basic 2 bed apartments in or close to CBDs may not fare well, but you will still have those strata fees…..

        • J4Jayden on 13/05/2020 - 10:20

          That makes a lot more sense actually. I looked at places like Tarneit (West) and a lot of new estates with 2BR places for about 400k. I am offloading a lot of items and should be able to get atleast 10k back. My car is up on sale so I will make about 4k on it on top of cutting down the debt and monthly repayments so I can in 5 months I should be able to save about another 10-15k.

          Great advice, thank you.

        • netjock on 13/05/2020 - 21:12

          On strata fees. It is be careful but use this real life example:

          1. A $200k 37sqm studio, 10 story building. Annual strata fee $5k no facilities
          2. A $400k 42sqm 1BR + Study, 40 story building. Annual strata fee $5k includes, 24hr receiption, gym + pool

          Apartment council rates are around $500 - $600 per annum.

          Yield is usually about 6% - 8% to account for no appreciation.

          Also save $2k a year in public transport costs plus commute time if you work in the city.

          But you know cancelled trains, smelling bad body odors and have questionable people rubbing up against you is … PRICELESS.

      • miwahni on 13/05/2020 - 22:44

        Hope it goes well for you.

  • elonmusk on 13/05/2020 - 10:23
    +1

    Have you utilised the First Home Super Saver Scheme?

  • web1993 on 13/05/2020 - 10:43

    I would wait. Commbank predicts that house prices could fall 32% over the next two years (with a 11% fall in prices being their most likely base case). https://www.abc.net.au/news/2020-05-13/cba-completes-bank-re…

    • JimmyF on 13/05/2020 - 11:23

      This is the reason why anyone (not just the OP) won't get a loan with a LVR over 80% in the current market, as prices are penciled in to go DOWN.

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