- Budgeting belies the best buyers
- Affordability doesn't mean austerity
- Be reasonable, you can have your cake but it doesn't have to be the finest in town
The housing market seems to be gaining more than just momentum and price. The right time to buy seems a moveable feast, indeed, sometimes a mirage given changes such as more stringent lending requirements.
That increased stringency in lending requirements means that prospective property buyers will need to prioritise saving deposit funds this year, according to Zippy Financial Group.
During the earlier stages of the pandemic, stimulus measures helped prop up property, Zippy Financial Director and Principal Broker Louisa Sanghera said “[first-time buyers] still remain active in the market, even after last year’s strong property price growth.”
Ms Sanghera also said last year’s minor adjustments to mortgage serviceability calculations had not resulted in a significant change in loan approvals.
Showing genuine savings remains vital for prospective property owners, she said, noting that “Lenders always want to see a genuine savings history, including funds that
represent at least five per cent of the property’s purchase price.”
“Banks generally recognise that it is difficult to save the deposit for your first
property, because of the added expenses of paying rent,” Ms Sanghera added, offering the following five tips for property deposit saving:
Top five property deposit saving tips
- Cut up your credit cards
- Make a budget and stick to it
- Reconsider owning a car
- Hold off the expensive holiday
- Consider selling unused items
1. Cut up your credit cards
Ms Sanghera said paying cash is a great way to prevent overspending:
“Before you go to buy anything, and before you hand over your hard-earned cash,
think do you really need to buy this?
With many businesses now going cash-free due to Covid, the following using the budgeting tip might help to temper temptation.
2. Make a budget and stick to it
“Be realistic and honest about your income and expenditure as well as your ability to
save,” Ms Sanghera said.
Sticking to the budget is also important.
3. Reconsider owning a car
Maybe you need a new car, but do you need to upgrade or get all the bells and whistles?
Personal loans for cars can be a big stain on your borrowing capacity, said Ms Sanghera.
“Before you decide to borrow $50,000 and pay exorbitant interest rates on a car loan, consider whether you need to upgrade at all or you can ‘make do’ with a more
affordable vehicle to achieve your homeownership goal,” she said.
4. Hold off the expensive holiday
Yes, borders are open and holidays are now a little easier to take but consider what type of holiday your heart desires.
Ms Sanghera said to look for more affordable options – alas, that private jet will have to wait.
5. Consider selling unused items
No, don’t take the opportunity to bag a bargain. Do the opposite!
Everyone has things lying around that they don’t want, don’t need, or simply don’t
use.
“Some of these items could actually be worth selling, especially if they’re of great
quality and in excellent condition, such as furniture, musical instruments, baby gear,
designer clothes, old bikes in the shed, etc. Plus, it’s never been easier to do so,” Ms
Sanghera said.
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Disclaimer: This article contains general information and should at no time be considered financial advice to the reader. The reader should always verify their situation with their financial advisors before taking any further steps.
