Should I Buy a Property or Not?

Pegadeals on 28/01/2022 - 12:23
Last edited 28/01/2022 - 12:24

First of all, sorry for the long post and my English.

Hi everyone, just want to get an opinion of what would you do in my situation.

My partner has bought an off-plan property (Hallam, Victoria) that me and her will eventually move into. We are not married yet (will do in a year) so stamp duty exemption and FHOG will be available and she will be using these benefits for the off plan property she’s purchasing.

Furthermore, the off-plan property will be rented out in about 5 years time as we will be moving back to her parent's other house (Knox, Victoria) that will be renovated.

I am also planning to buy since I might be able to utilise FHOG or stamp duty exemption. I have about 170-200k in savings and the bank have assessed that with my income, I could borrow up to 575k for a property and the main reason to purchase is that I have a sister that can stay there and ‘help’ with mortgage as well as a place to stay if my family from overseas visits. The location I’m looking at is around endeavour hills or Hallam in Victoria as it is near the off plan property.

The ultimate goal is for everyone to move back to the Knox area.

Since a 575k property won’t really get a great property, my question is:

  1. Should I keep the savings and not buy (losing FHOG and stamp duty exemption after marriage). Sister will be renting in Hallam area and ultimately we will buy property in Knox.

  2. Buy a property using the grants and sister will stay there and pay some rent and ultimately lease the property once we move back to Knox and try to buy another property at that area.

  3. Buy a property using the grants and eventually sell it to buy another property in Knox once we move there.

Poll Options

  • 5
    Save up deposit, lose the grants and buy later
  • 3
    Buy a property using the grants and rent the place out later
  • 49
    Buy a property using the grants and sell the place later
Financial

Comments

  • jsb on 28/01/2022 - 12:46
    +2

    Get a preapproval first.
    If banks say you could borrow 575k, means you can buy property worth 575k+ 200k (your deposit) - expenses. Also there might be some stamp duty if you cross 600k, I am not sure of the current rules. Talk to your broker and get maximum pre-approval

    • Pegadeals on 28/01/2022 - 12:55

      I've spoken to a broker, my bad for not making things clear but they've assessed that my maximum borrowing capacity is about 575k.

      • jsb on 28/01/2022 - 12:59

        Great. So borrowing capacity of 575k does not mean property price of 575k. You can buy more than 700k property based on your savings especially when you have more than 20% deposit.

        • Drakesy on 28/01/2022 - 15:09

          It's this thought process that has led to the debt bubble we're in today.
          The bank isn't there to make sure you pay off your loan
          The bank facilitates the process but by no means is there for the borrower.

          If interest rates go up they won't be there to support you.

          • jsb on 28/01/2022 - 16:36

            @Drakesy: I understand what you are saying but that was not my thought process.

            OP mentioned they could borrow $575k and then mentioned property value of $575k as well.
            Its a common misunderstanding that what brokers/bank say you can borrow is the maximum property value they can purchase.
            I was merely correcting it.
            Having said that, Op should evaluate his own circumstances and check possible EMI even if rates are increased by 2-3%.

  • Mr Haj on 28/01/2022 - 12:46
    -1

    Why does everyone recommend buying only to sell? Won't all of the grants just be offset by the cost of selling in five years time? Just rent the property out.

    • Pegadeals on 28/01/2022 - 12:56

      Letting the property pay by itself right?

  • tsunamisurfer on 28/01/2022 - 12:50
    +2

    NO one knows how the markets are going to go.

    All these recommendations are wild guesses.

  • Muzeeb on 28/01/2022 - 12:52

    Market is apparently about to peak.

    No one wants to buy at the peak.

  • Stopback on 28/01/2022 - 13:00
    +11

    A couple cannot get FHBG x 2, wouldn't risk it. Even if you not married.

    • rektrading on 28/01/2022 - 13:03

      Don't get married or move in together until after getting both of the free grants.

      • rektrading on 28/01/2022 - 13:09

        It's relationship advice.

        @mokr

    • Traveller107 on 28/01/2022 - 18:08
      +6

      As mork said a couple (married or unmarried) can only get one fhog. Trying otherwise would be scamming the system and I know someone who had to repay it.
      Cheers

      • bemybubble on 29/01/2022 - 20:21
        +1

        Seen it many times too. Data matching is sophisticated these days. You will get caught.

  • kanmen on 28/01/2022 - 13:00

    I'm not sure I have a response to your questions but to point out two things.

    The location I’m looking at is around endeavour hills or Hallam in Victoria as it is near the off plan property.

    Knox is about 20 minutes from Hallam. Unless your purpose is to be close to your sister and be more accessible I don't think this is a big distance. If you're planning to be in that area ultimately why not buy in Knox? Honestly it probably will have a better resale value than the South-East.

    Secondly, to get FHOG and the stamp duty exemption you need to live in the property for at least 12 months. Have you factored this into your living situation?

    • Lunarboogie on 28/01/2022 - 17:59
      +1

      Huh? It's more like 40 minutes, on a god day. Who wants to spend their lives in traffic - not me!

  • rektrading on 28/01/2022 - 13:01
    -2

    What comes after an ATH? Another ATH.

    Debt is a tool to accumulate assets. Use it or someone else will.

  • djkelly69 on 28/01/2022 - 13:03
    +3

    stamp duty exemption and FHOG will be available and she will be using these benefits

    and

    I am also planning to buy since I might be able to utilise FHOG or stamp duty exemption.

    Might want to double check the SRO website re. eligibility, because it took me one minute to find this:

    You’re not eligible for the FHOG if you or your spouse or partner have already:
    - received the FHOG in Australia

    • rektrading on 28/01/2022 - 13:04
      +2

      Don't get married or move in together until after getting both of the free grants.

      • djkelly69 on 28/01/2022 - 13:06
        +1

        Not really clear from the OP if they are already living together or not.

        Also that is not the only factor they look at when determining if you are 'partners' or not.

        • rektrading on 28/01/2022 - 13:10

          Friends with benefits are still legal in Australia, is it not?

      • Hearthstone on 28/01/2022 - 16:43
        -1

        doesn't matter if you living together or not if your name has not been on a properties title you
        are effectively a first home buyer and you are qualified for all FHG

    • Hearthstone on 28/01/2022 - 16:48
      +1

      a bit hard to prove partner if her name is not on the bill or paperwork

  • jv on 28/01/2022 - 13:15
    +13

    You need to talk to your accountant or a qualified financial advisor who can better assess your financial position.

    Don't make such big decisions based on advice from random people on the internet…

    signed,
    Random person on the internet.

  • serpserpserp on 28/01/2022 - 15:07

    Yes

  • cashless on 28/01/2022 - 16:25

    No

  • Ghost47 on 28/01/2022 - 17:12

    Why not, have a punt.

  • freefall101 on 28/01/2022 - 17:23
    +5

    Providing false and misleading information can lead to a criminal conviction under the FHOG Act.

    If you're planning on getting a FHOG without living in the property or fail to declare that you have a spouse (marriage is completely irrelevant, if you're living together and engaged she's probably legally your spouse) you can face fines and a conviction.

    • rektrading on 28/01/2022 - 17:39
      +2

      The Legal Definition Of A De Facto Relationship
      De facto relationships are defined in Section 4AA of the Family Law Act 1975

      According to this act, you are in a de facto relationship if:

      you are not legally married to each other
      you are not related by family
      you have a relationship as a couple living together on a ‘genuine domestic basis’ < make sure to fail this test.

      You do not need to register your de facto relationship – it automatically applies when two people meet the above criteria.
      https://separationagreementtemplate.com.au/de-facto-relation…

    • Hearthstone on 28/01/2022 - 18:47
      +2

      Ok I thought if you never has your name on any properties title be it sole owner or join ownership you are ok but I was wrong I went and did some reading and found this

      What If I’m a sole owner buying with a partner?

      If you’re buying the property as a sole owner (sole ownership) but intend to live with a de facto partner or spouse who has received the FHOG in the past, your FHOG application will be knocked back.

  • [Deactivated] on 28/01/2022 - 22:25
    +1

    i got one, last year with all the grants, its now worth 400k more than what i paid for it. in another 8 months it will be more worth more and ill sell it and move to another state.

    • miwahni on 29/01/2022 - 02:22

      I hope you're not in Sydney… saw a valuer comment today "early signs of flattening market"… but good on you for the CG so far!

    • netjock on 29/01/2022 - 19:34
      +1

      Yeah I get the joke.

  • 2esc on 29/01/2022 - 09:02
    +1

    You know you don't have to borrow as much as you can. You can borrow less it also let's you have extra cash to do changes to the property to make it a great property. Unless of course you need the status of a better house than your friends. Borrowing less also let's you do other things in life.

  • Ade99 on 11/02/2022 - 14:46

    20 years ago the big Ozzie dream was to buy your own house. Now the big dream is to buy a house for other people to live in!

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