First Home Buyers

Reporter: Graeme Butler

It's been a viscous circle for Perth's first home buyers - the longer you save - the faster the cost of your first home gallops away. "It terrified us definitely you're paying rent looking at the prices of mortgages you have to pay and it's just crazy" Andrew and Lucy Taylor are first home buyers who believed their great Australian dream had gone - but now they're just about to start building - "we didn't even realise we could get this"

We'll tell you how they got into the market soon - but first some key advice from industry experts about getting you into a home of your own.

Dale Allcock says "in terms of saving money, the sheer space, the sheer volume of the home is an important starting position don't make it too big, make it appropriate maybe less rooms but larger rooms"

John Symond says "if I were a first home buyer I would save for a deposit I wouldn't go in and borrow 100% and take advantage of the softening market"

Nick Bruining says "there are quite a few incentives for first home owners we've got things like the first home owners grant stamp duty concessions and all those sorts of things"

"Location is you most important criteria consider high density living and look under the Perth medium price is my first tip" One of the first steps for first home buyers is deciding where you want to live - according to Shane Krompton from Harcourts real estate - despite the housing boom there are still affordable suburbs but first homebuyers must be flexible. "Suburbs like Byford in particular offer some vacant land around the 200 thousand a bit below which is a great starting point a first home buyer can grab a block of land and they do a house and land package and be in there for under 350 which is good news"

So which suburbs should first home buyers being looking at..... If you want to live closer to the city - consider older style apartments - in suburbs like Como, south Perth, Vic Park - or suburbs like Balga that are under redevelopment. "It didn't have a good reputation a few years ago but now with the New Westminster style of living there are some good modern apartments in there you're 15 minutes away from the city 15 minutes away from the coast that's a good suburb to buy in" Shane says other suburbs with established homes under 400 thousand are Warnboro - Waikiki - Cooloongup - Port Kennedy - Clarkson - Ferndale - Queens Park - Mirrabooka - and Koondola.

"For the astute investor or first home buyer you buy something like a triplex site that has an old house on it tough it out live there it is a slight compromise yes maybe compared to where mum and dad live but they started somewhere too so consider this as your starting point an investment"

Saving a Deposit

So how do you save for a deposit... with high rents there's no doubt it's hard - but remember the upside of high interest rates is better savings - financial planner Nick Bruining, "there are some great deals out there at the moment with respect to where you save your money now you would never go into anything like shares or those sorts of risky sorts of investments if you're planning on buying a property in the nect two years but I tell you what there are on-line bank accounts that are paying 7 1/2 % at call no fees and charges no minimum amount and no terms that allow you to really boost those savings quite significantly"

In addiction to the first homebuyers' grant of $7000 the new federal government has introduced a first home saver account to help people save for a deposit. "It's planned to start on July 1st basically you stick $1000 a year into your home saver account it will operate a little bit like superannuation the government will actually kick in co-contribution if you like linked to what your tax rate is an dhow much you kick in"

Nick Bruining says the scheme is a good idea but is unlikely to have a dramatic effect anytime soon. "You need to have the scheme running for 4 years to get the benefits so here's the sting if you like you're certainly getting some great benefits but it'll be 2012 before we really start to see the benefits flow on"

The other government scheme making it easier for first home buyers is shared equity and its how Andrew and Lucy got into their home - they buy 60% and the government buys 40% and next to no deposit up front. "Really as well it's allowed us to use the home owners grant to cover all of our fees so I think up front we've only had to come up with about $2500 and we're borrowing I thin $340,000 so that's real incredible for us" The house Andrew and Lucy are building has been specially designed for first homebuyers budget.

If you're building a home the design can save you a lot of money - consider less rooms - it saves money on construction ... Dale Allcock "in terms of saving money the sheer space the sheer volume of the home is an important starting position don't make it too big make it appropriate maybe less rooms but larger rooms"

The key point to remember is you're building your first home - not necessarily the home you want to live in for the rest of your life. For people building their first home the appliances and fittings you chose can either cost or save you a fortune and it is a good place to start if you are looking to save money remember you can always upgrade later"

Dale Allcock says "I think when it comes to a potential homeowner looking at building a new home they almost want to be like a canny investor really and say well look this is an investment, we'll be in this home, and it's our first one. We're not going to go over the top and there's a great range of accessories tiles and bench tops and fittings that are available and some of those you can get a really contempory look without the expensive price tag" With property prices in Perth slowing down - experts say it is a good time for first home buyers.

John Symonds from Aussie Home Loans

Tips for Perth First Home Buyers looking for property

1. Work out how much yo ucan afford to spend before you look. knowing how much you can afford acan be easily done by engaging a mortgage broker like Aussie. Aussie represents 17 lenders, including hte four major banks.

2. Research "family equity" home loans where parents can help children secure their first home. Family equity mortgages reange from a guarantor providing servicing support to a guarantor providing security support or a combination of the two.

3. Buying a home is a time consuming and emotionallly charged experience. Do not waste your energy looking in the wrong direction. Look at as many properties as possible in your price range to get an idea of what you can afford.

4.Ensure the land, home or apartment you buy is not over-priced. Check the prices paid for other properties in the area where you are looking.

5. Shop around for the best possible home loan you can afford, both in the amount of deposit required and in ongoing monthly payments. Look at the fine print for monthly service fees and other charges.