The latest data shows first home buyers are re-emerging in the property market. As of September, 17.4 per cent of purchases were first home buyers - up slightly from August, and a real improvement from the 12 per cent they represented a few years ago.
A couple of trends are driving this. Banking policy is making the market attractive for property investors, so there's less competition. Additionally, new first home buyer incentives in New South Wales and Victoria have eased the pressure in two of the hottest markets.
But if you're still struggling to get your foot onto the property ladder, don't lose heart. Here are a few tips to consider as you look towards 2018 and set some financial goals.
Advice: good advice is still the best starting place for a first home owner. Find a mortgage broker - or another trusted expert - and understand the basics of what you're aiming for, including mortgage repayments, deposit size, your household budget and government grants. Understand all your options.
Deposit: most first home buyers have to save. The best way is to set a goal, open a designated high-interest saving account, and make regular contributions to it. The best savers are also budgeters - they construct household finances around the savings goal. Be positive about saving: the greater your deposit, the greater your choices.
Servicing: the lender takes your income and living expenses, and determines the maximum mortgage repayments you can make. In the past, you could often estimate your household expenses - now, lenders want evidence of your spending patterns. So, you need to get serious about sticking to your budget, well ahead of applying for a loan.
Credit: first home buyers should beware of saving for a deposit while also using credit cards. Those cards count against your serviceability (the limit, not the balance) and missed payments can affect credit scores. In the lead-up to your application, pay off debt, reduce your credit limit and make all payments on time.
Rent-vesting: OK, so you can't buy where you want to live? Instead, buy an affordable investment property, and rent in the postcode you want. The deposit and repayments will be lower for a cheaper property, and you'll be into the property market with a tenant helping with mortgage repayments.
Family guarantee: if saving a deposit is the major impediment to buying a home, think about the family options. Family members can give you the money, as long as it doesn't have to be repaid; a family member with property can go guarantor on the loan, meaning their property can act as security; a family member can be a co-borrower, in which the loan is jointly re-paid.
In the end, everyone who buys property finds it hard and time-consuming. Your challenge is new but not unique. The best you can do is be well-researched, well-advised and well-prepared.
And always remember, with property you're playing a long game. It's an asset that gives you security, a place to live and wealth-creation opportunities over your lifetime.
So don't be demoralised: saving for a deposit might take a few years, but the benefits last for decades.
Mark Bouris is executive chairman of Yellow Brick Road.
