Melbourne’s Housing Market Is Shifting—Here’s How To Turn Your Deposit Into A Home
It’s a fast-changing economy right now, but for Melburnian first-home buyers or builders who’ve saved their deposit, it’s looking good. Melbourne house growth has been slower than other capital cities across the country, and it’s recently been reported that up to 74 per cent of Victorian properties are selling below their listed price.
So we’ve teamed up with our mates at Homebuyers Centre—with expert finance, land, home and building services—to demystify what happens after you’ve saved that deposit, as you take your first step onto the property ladder.
I Have Some Savings, But How Much Do I Need To Get Started?
A first home deposit is usually (but not always) about 20 per cent of a property's value. There are a few extra expenses to take into account, which we’ll break down below. But with your savings banked, you must secure pre-approval from a lender.
That’s the process of being assessed to confirm how much you can borrow, based on your savings, income, debts and assets. It doesn’t cost anything, and it doesn’t lock you in, but it does mean you’re good to start the property hunt.
Many people consult a mortgage broker at this stage, who basically finds the best loan for you, because some mortgages are fancier than others, like maybe they help you get more rewards points.
Now is also a good time to become familiar with the rules around the $10K Victorian First Home Owner Grant, which applies to new homes up to $750,00 and can come with potential stamp duty exemptions or concessions.
There are also applicable property value and duty (also known as stamp duty) benefits for first home buyers in Victoria: up to $600,000, you pay no duty; $600,001 to $750,000, you pay a reduced amount of duty.
What’s duty? That’s a tax—and you need to factor this one into your budget. It can vary wildly and up to tens of thousands or more, depending on the value of the home.
Hot tip: You don’t always need 20 per cent saved—you can start with just $5K. In partnership with Resolve Finance, Homebuyers Centre’s $5K* deposit pathway helps eligible first home buyers secure a selected house and land package with just $5K* upfront. A Homebuyers Centre New Home Consultant works in tandem with a Resolve Finance mortgage broker to help you understand your borrowing capacity, eligibility and options.
Research Areas That Suit Your Budget
You probably already have a rough idea of where you want to live and what kind of property you're hoping to land. But it’s surprising how quickly your understanding of the market changes when you get offline and start exploring what's out there—you’ll get a nose for a fisheye lens quick smart.
It's also important to keep an open mind when property hunting—having too narrow an idea of location may not match up with your budget. Be realistic about what you can afford, and measure up what you're willing to sacrifice to make it work.
If you're going down the established property route, make yourself known to the local agents at open for inspections. Ask questions, look inside every cupboard and be sure to follow up later to see what the place goes for. It’s all part of a process that will have you assessing the value like a pro within weeks. If you're planning to build, start thinking about what your home could look like on the land you can afford—you might be surprised by how much you can get for your budget with a house and land package.
You’ve Found Your Dream Property—What Next?
You’re ready to make an offer. Take a deep breath, because we’re up to the really boring but important bits. If you're buying an established home, get your hands on The Section 32 (or vendor statement) that relates to the property. In simpler terms, that’s a set of documents that includes info about the property that might affect its value.
You’ll need a conveyancer on board to help with this, and to review the contract of sale, and yep, it costs a bit—expect to pay from around $800 to up to a couple of thousand dollars, depending on the complexity. Some conveyancers offer fixed fees. The best way to find one is to ask your mates for recommendations. And, don’t forget the building and pest inspection.
Now, you’re ready to make your offer or bid at auction. An offer needs to be submitted in writing, with a three-day cooling-off period applying (that means you can still change your mind, but there's a financial penalty). If you win at auction, there’s no cooling-off period—that sale is hot to trot.
What About Buying A House And Land Package?
Great question—the process and the outcomes are slightly different, and you don't have to worry about things like auctions, inspections or pre-settlement inspections. It's a simple case of finding the land and design that suits your budget (and where you want to live), and locking it in. There are actually two different contracts for buying house and land—one for the land purchase, and one for the build.
This path can come with big advantages, because while you have to wait for the home to be built, you can personalise it to suit. Homebuyers Centre offers house and land packages for all budgets, from spacious three-bedroom homes to modern townhouses.
What Happens Once I Make The Purchase?
Chookas, you're about to join a community that pays close attention to announcements by the RBA about interest rates. But first: it’s time to sign the contract, pay the deposit (usually 10 per cent, but you can negotiate) and finalise your finance. Get back in touch with your lender or mortgage broker, and pin down the details of your loan.
Which brings us neatly to, usually around 30–90 days later, settlement: your final legal step in buying a property, where ownership officially transfers to you.
If you've gone down the established home route, here’s also a nerve-wracking pre-settlement inspection that doubles as the ‘What have I done’ or ‘this is smaller than I thought’ moment of the home-buying process. Then, you pay the balance, get your name on the title and pick up the keys.
If you're building new, you'll work with a builder to find the right setup that suits your block of land, sign a Preliminary Works Contract and pay a deposit to lock it all in. From there, the fun can start with choosing colours, specs and all the final bells and whistles you want before the build commences.
Buying your first home is a minefield, and partnering with experts like Homebuyers Centre can help get you there sooner. Find out more here.
Editor’s note: This article is sponsored by Homebuyers Centre and proudly endorsed by Urban List. Thank you for supporting the sponsors who make Urban List possible. Click here for more information on our editorial policy.
*Terms and conditions apply, see Homebuyers Centre website for details. The building practitioner is ABN Group (Vic) Pty Ltd trading as Homebuyers Centre CDB-U 49215 and Resolve Financial Solutions Pty Ltd trading as Resolve Finance ABN 65 079 545 378, Australian Credit Licence No. 385487.
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