Career & Money

Everything You Need To Know About Buying A House In 2021

By Sophie Oddo
8th Jul 2021

A couple sitting on their front stairs kissing.

When it comes to the Australian dream, it doesn’t get much better than owning your own home. Admittedly, the last 18 months have thrown us a few hurdles, so it’s safe to say that the idea of turning your home-owning dreams into a reality can feel a little daunting.

It can be hard to know where to start, so we’ve partnered up with Aussie Living Homes to uncover everything you need to know about buying a house in 2021—and why it might be more achievable than you think. 

Assess Your Current Situation

When it comes to buying a house, there are many factors that influence how much you can borrow and therefore what you can afford to buy. The reality is, when it comes to applying for a home loan, your lifestyle and finances will be assessed with a fine-tooth comb, so it pays to be prepared—especially if you’ve gone through some significant changes due to COVID-19. 

One of the most important things to consider is your job security. Most lenders will prefer if you have been in your current job for at least 12 months as it demonstrates a stable source of income. The higher your job security, the lower the perceived risk to the lender. Your lender will also need to know about your type of employment (whether it's part-time, freelance or full-time) and the prospect of your continued employment with that company.

Aside from your day-to-day job, your number of dependents (or soon-to-be dependents) will also affect the amount you can borrow as the cost of living increases. Usually, the amount you can loan will decrease up to $60,000 per dependent to account for costs such as childcare, medical and education.

In addition to this, home loan lenders will place your bank statements under a microscope to understand and analyse your spending habits. In the lead-up to your home loan, make sure you have at least six months of solid spending habits to show for. That means regularly putting away savings and not going overboard with non-essential spending. Showing you lead a financially-responsible lifestyle along with a steady income will go a long way in securing a home loan.

Reconsider Your Rent

So much has changed since the unwelcomed arrival of the global pandemic (don't we all know it), and one of these things is rental rates. With the pool of available rentals plummeting by a huge 63%, the fight for rentals has seen a huge surge in price. Such a surge in fact that the median Perth rental price sits at $430 per week—the highest in six years

Increased rental pressures and limited housing available in Perth mean renters are pressured to find somewhere fast. With historically low-interest rates at the moment, buying and/or building is now looking more appealing than ever. So, if you’re paying around $350 per week, it might be time to seriously reconsider those rental costs and consider funneling them towards owning your first home.

Keen to know how much you’re forking out to your landlord? Use this calculator to work out just how much you could be putting towards paying your own mortgage (trust us when we say it’s very sobering). 

See If You Qualify For Grants

If you’re not feeling too positive after assessing your financial situation, the good news is that you might also be able to qualify for some additional help from the government. One of these is the first homeowner grant (FHOG), which is a one-off payment of $10,000 to encourage and assist first home buyers to buy or build a new residential property for use as their principal place of residence. And if you're eager to roll your sleeves up, you can also check to see if you qualify for the HomeBuilder grant, which provides eligible owner-occupiers with a grant to build a new home, substantially renovate an existing home, or purchase a new home off-the-plan. But, like all government grants, there are a few requirements to meet, so make sure to check online if you can qualify for the funds.

Suss The Federal Budget Schemes

In addition to government grants, the 2021 Federal Budget also extended schemes and added some programs to get young Aussies into the market. The First Home Loan Deposit Scheme (FHLDS) has been extended to help low and middle-income earners buy a modest home with just a 5% deposit, with the additional 15% being provided by the federal government. An extension of this scheme is the New Home Guarantee Scheme whereby the government has provided an additional 10,000 FIELDs specifically for building new homes or purchasing a newly-built home (on or after 1 January 2020). So if you’re after that new-build smell but without the hard work, be sure to check out Aussie Living Homes house and land packages where you’ll get access to the best blocks in the best locations across Perth along with your dream home design.

As well as FHLDs, the First Home Super Saver Scheme is another way to reach your deposit quicker. This year, the government has increased the maximum amount of voluntary contributions eligible to be released under the scheme from $30,000 up to $50,000. That means you can make voluntary contributions to your super fund (up to $15,000 per year) and then release up to $50,000 of those contributions to go towards your home deposit. As super contributions are only taxed at 15%, this is an easy way to maximise your income and help you to stay motivated towards your goal. 

Stop dreaming about owning your first home and start making it a reality with the help of Aussie Living Homes, Perth’s first home building specialists. To find out more about creating ‘Aussie As’ life moments and securing your first home, click here

Image credit: Tai's Captures

Editor’s note: This article is sponsored by Aussie Living Homes 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.

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