What’s up (or down) with home buyer confidence?
You've got to be confident to get involved in the Surfer Paradise property market – or any real estate landscape, for that matter. Saving for and making a deposit on a home is a big deal, even if you already have equity in an existing piece of real estate.
The roadblocks that people face on the way to buying property are something that Genworth regularly assesses in its biannual Homebuyer Confidence Index (HCI). With the latest edition of this released in March, it's a good time to have a look at why people are feeling good, or bad, about their property prospects.
Deposits still an issue for home buyers
While the overall confidence level in the HCI fell for the first time in nearly two years, this itself doesn't offer much insight into the property market. However, the reasons why people aren't confident and what they view as the biggest obstacles are much more useful.
Bridget Sakr, chief commercial officer at Genworth, explains how deposits on property are a consistent issue for Australians.
"One third of respondents indicated that high property prices are the greatest barrier to home ownership, while a quarter suggested the barrier is saving for a deposit," she noted.
"The difficulty in saving a deposit has increased by 20 per cent since September 2015."
Real estate in Surfers Paradise isn't likely to be exempt from this shift. Residex data indicates that as of February 2016, house values had grown by 4 per cent and unit values by 6 per cent. As prices and values creep upwards, so does the amount you need to put together for a deposit.
This is a particular problem for first home buyers (FHBs), with the Genworth report indicating there has been an 82 per cent rise in the number of FHBs who say the deposit is the biggest barrier between them and real estate. So how do you address this problem?
Breaking down the roadblocks
Based on the Residex figures above, a 20 per cent deposit on a house in Surfers Paradise is nearly $250,000, while for a unit it is significantly lower, at just below $70,000. Either way, this is a lot of money to put together – but the obstacle is far from insurmountable.
There are many ways to develop a strategy to secure property. As mentioned above, if you already own Main Beach real estate (or a home anywhere else), then you can leverage equity from this property to go towards your next deposit.
Additionally, you can use guarantors or alternative loan options with lower deposits to get ahead. An important thing to remember here is that if you deposit less than 20 per cent, you will likely be liable for lenders mortgage insurance, which introduces a new set of costs.
And for first home buyers, there is the Great Start Grant, which provides up to $15,000 for properties less than $750,000 in value. Clearly, the options are there to make up deposits, it is simply a case of getting the right professional help and making it work for you.
Get to know the market
As well as these strategies, you have to know the local market. While growth continues throughout real estate on the Gold Coast, using a property agent who knows where to find homes that suit your financial situation can be incredibly beneficial.
At Ray White Surfers Paradise, we have decades of experience helping people find real estate that suits both their budget and their goals. Whether it is a luxurious apartment overlooking the beach or a secluded detached home on the waterfront, we'll help you get what you need.