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Questions we have for millennial homeowners
How long did you save for? How much help did you really have from your parents? Now that it’s all over, are you happy? The answers to these burning questions and more from real millennial home buyers.
Alice, 28
Alice purchased her first home, a one-bedroom unit off-the-plan, in Melbourne’s Brunswick. Though she originally purchased the home to live in herself, she’s since changed her mind after moving to a new state and plans to seek out a tenant once the build is complete.
How long have you owned your home?
I put down a 10% deposit two years ago and I will be settling on the property when it’s finished later this year. I wouldn’t call myself an official homeowner until I get my home loan approved, although I do own 10% of it currently.
Did you have any help in saving for your deposit?
Not for my 10% deposit. Although if I’m short of the 20% deposit when it’s time to settle, my parents may go guarantor for the remaining amount, so I can avoid Lenders Mortgage Insurance. I’m at about 18% at the moment, so theoretically it will be paid off by the end of the year.
What sacrifices did you make in saving?
I like clothes, but I only treat myself three or four times a year to new things now. I only buy my lunch for a special occasion or every so often when I’m desperate to mix it up. I stopped drinking coffee and I rarely go out. I also walk where I can to avoid public transport or Ubers. Oh, and I sold my car to avoid the associated costs. So yeah, I would say I sacrificed a lot.
Major hurdles on the road to homeownership?
They say the deposit is the major financial hurdle, and it’s true, but it’s definitely achievable if you set your mind to it. Now that I’m getting closer to settlement, my major hurdles lie in the application process and sorting out my rental agency to make sure I have a tenant into my apartment straight away.
What compromises did you make in the home you eventually bought?
I got everything I wanted at the time and I paid a bit more for it, too. I wanted a modern apartment that had a point of difference from a renowned architect and builder. I didn’t want cookie-cutter. In hindsight, now that I’m not living in it, I would have been prepared to compromise on my personal preferences to get something that was purely a good investment.
Advice for other millennials on the home buying journey?
Learn to love cooking; it really saves you so much and it’s fun. Go out less but make it count when you do – don’t be a party pooper! And if you’re tossing up between investing or living in the property, try to consider a property that might tick both boxes. You never know what’s going to happen.
Emily, 30, and Ross, 36
Emily and Ross purchased a vacant block of land with water views in Mooney Mooney, NSW, about an hour from Sydney. Now they’re in the process of designing and building their forever home; a place they’ll live in for the foreseeable future.
How did you save for your deposit and how long did it take you?
My boyfriend has been saving since his early twenties, and I started saving properly about four years ago. We both deposit lump sums of our paychecks into savings accounts and put any bonuses straight in there too. My boyfriend has also dabbled with stocks, index funds and peer-to-peer lending, so that his money was working hard and wasn’t just sitting there.
What sacrifices did you make in saving?
My partner and I lived in London until last year. At the time we were taking trips around Europe almost monthly while we lived over there and eating out at least a few times a week, but all of that has come to an end now.
After moving back we both began living with my parents on the Central Coast, which has been a big sacrifice for both of us, as we now spend about four hours each day commuting.
Saving also had quite an impact on our social lives, as nearly all of our friends still live in Sydney. Not to mention, there are no pubs, restaurants or shops within walking distance from my parents’ place, so it’s a far cry from the convenience of our London life.
While we’re so incredibly fortunate that my parents have been willing and able to house their fully grown daughter and her boyfriend, losing a little bit of my independence has been probably the biggest sacrifice.
What compromises did you make in the home you eventually bought?
Buying a block of land and building on it was definitely not our Plan A, so it’s fair to say we’ve compromised by not purchasing a house that’s ready to move into. The land will still be a decent commute to work and to see our friends, but we are quite happy to compromise on distance in place of peace, quiet and water views.
Advice for other millennials on the home buying journey?
Cutting back on meals out, booze, expensive holidays and downsizing to somewhere with lower rent is my main advice.
Learning to feel comfortable with saying ‘no’ is important, too. If you’re saving for a house, you really can’t afford to say yes to everything, as bad as your FOMO may be.
How do you feel about being a homeowner?
It’s quite surreal because we don’t actually live there yet, but I love it! Yes, making mortgage repayments and paying council rates and other fees are a huge financial responsibility, but I’m at a point in my life where I’m ready to sacrifice brunch with friends for the freedom to put hooks in my walls.
Jacob, 27
Jacob purchased his first home, a two-bedroom unit in Sydney’s West Ryde, two years ago. Though he originally intended to live in the home, his plans changed as the hunt progressed. Now, the unit is considered an investment property.
How did you save for your deposit and how long did it take you?
I saved for approximately four years for the deposit; ever since I started full-time work.
Did you have any help?
Oh yeah, my parents chipped in money for the deposit. It would have been impossible to purchase what I wanted without their assistance.
What sacrifices did you make in saving?
I didn’t move out of home for the time I was saving, as doing so would have made it far too challenging to save the money required.
What property jargon stumped you the most?
All the extra taxes I didn’t know existed. I found myself doing a lot of research and seeking out the help of a financial planner to help me navigate the industry lingo. Now, I understand everything to some degree, but still get confused from time to time.
What compromises did you make in the home you eventually bought?
Originally I wanted to purchase the unit in the Northern Beaches, but the properties there were too expensive for my budget. As a result, I began to look in a different part of Sydney that I found less appealing to live in. I suppose that’s why I changed my mind about living in the home myself.
How do you feel about being a homeowner?
I don’t feel a major sense of accomplishment just yet, but I like to think of it as a long term investment. I’m not making any money on it now, but hopefully I will in 10-20 years.
Jessie, 32, and Daniel, 32
After growing their family by two (and outgrowing their first apartment), Jessie and Daniel decided to settle in Sydney’s Sutherland Shire. They purchased their second home together, a four-bedroom suburban house they’re calling their ‘maybe forever home’.
How did you save for your deposit and how long did it take you?
The deposit for this home came from the equity we built in our first purchase. When we bought our first property 10 years ago we only needed a 5% deposit (which was much easier to save for).
What sacrifices did you make in saving?
The deposit for our first home didn’t require much sacrifice at the time. We were both living at home with our families and working full time, and only needed 5% of the cost of our unit at a time when the market was low. Lucky timing!
Major hurdles on the road to home ownership?
Missing out on properties we’d become emotionally invested in. And then once purchased I guess the ongoing stress of repayments and trying to balance that with still being able to take holidays and maintaining a lifestyle that we’d like.
How many open homes did you attend before finding your property?
We looked on and off for years – so many. But when we actually made the decision that it was the right time for us to buy we probably went to 10-15 open homes before finding the right one.
How many offers did you put in before yours was accepted?
Just one! We went in pretty aggressively – despite offering less than what they were asking, we turned up to the real estate agent with a cheque ready, finances approved and a 66W certificate, which waves the cooling-off period. This type of guarantee made it very hard for the owners to turn down. They did ask us to offer a bit more, but we said no.
Your advice for millennial buyers?
Get good financial advice. It pays to seek advice from a mortgage broker that you trust and it will save you money in the long term. Research loan conditions with different banks and have all of your finance approved before starting on the journey, because there’s nothing worse than falling in love with a property and missing out because of loan approval times.
Aaron, 27, and Emma, 24
Aaron and Emma purchased their first home together, a single-storey, four-bedroom home off the plan in western Sydney, in July 2018.
How did you save for your deposit and how long did it take you?
It took us two years to save for the deposit. Of course we had to sacrifice little things to get there, but we were on top of our budgeting the whole time. We didn’t have help from our parents, but my fiancé received a few bonuses which helped us to get on the right track.
What sacrifices did you make in saving?
Less going out, less eating out, and a major change to my online shopping habits. We made little changes like finding sales when grocery shopping, too.
How many open homes did you attend before finding your property?
None! We knew we wanted to build our own home.
What compromises did you make in the home you eventually bought and built?
We got most things we wanted but we did compromise on finishes like tapware, door handles and cupboard handles. Luckily, those are things we can easily change ourselves at a later date.
How do you feel about being a homeowner?
Amazing! I’m super grateful and excited to be on this journey with my fiancé.
Sophie, 32
Sophie had something of a jump start to her property journey, securing a two-bedroom apartment in Dee Why seven years ago. She called the flat home for four years before moving on and finding a tenant.
How did you save for your deposit and how long did it take you?
I’ve always been quite frugal so I just made sure I was putting away every dollar I could until I had enough for the deposit. I had a decent pool behind me then decided to ramp it up 12 months before I bought this apartment. My parents motivated me to save but they also contributed a set amount to each of their kids.
Major hurdles on the road to homeownership?
The hurdles actually came after I’d made the purchase. The first two years were hard and I sacrificed a lot. I didn’t socialise as much as I’d have liked and my lifestyle changed. There were tears when unexpected bills came through, but I am grateful it was hard because I appreciate those sacrifices so much more now.
How did you find the loan approval process?
I worked with a mortgage broker who was also a family friend and someone I trusted. He explained everything in normal language (not in property jargon), and now I would recommend a mortgage broker to anyone.
How many open homes did you attend before finding your property?
I got really lucky. I spent one Saturday with my parents looking at apartments. I hadn’t planned to inspect the one I ended up buying; it was actually across the road from another open that had been cancelled at the last minute, so we decided to take a look. I put in an offer in writing on the Monday morning after the Saturday inspection and then negotiated $2,500 more on the phone with the agent that same day.
Advice for other millennials on the home buying journey?
Read the The Barefoot Investor. He has some great advice for saving and it really does work, and don’t try to buy a home above your means.
How do you feel about being a homeowner?
It’s great! I don’t think much about it anymore. The apartment looks after itself now and it’s now a lovely home for someone else to enjoy.
by Katie Skelly (9th August, 2019. REA.)
Questions we have for millennial homeowners
palmbeachfn.com.au August 2019
First National Palm Beach
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