Buying a House as a 24YO in VIC

Shepard on 14/08/2020 - 11:43
Last edited 14/08/2020 - 14:39

Good morning all,

I don't really have anyone I trust to speak to so I thought to ask my Ozbargain fam. I think you have the gist of what information I'm looking for but here are some points to take note of.

  • I'm a Singaporean trying to migrate to Australia. I've been in Australia for the past 9 years.
  • I have full time hours (I get paid $900 a week) despite the job premises being casual. I moved in the company to a more stable position but they haven't gotten around doing up my contract yet because my boss said that due to the COVID situation they cant hire anyone into newly made positions.
  • I've got savings of 80k.
  • Ideally, I'd like to buy a place with at least 2 rooms so that I can rent the other out. A small backyard area is preferable as well as I've got a dog. It doesn't have to be very large. it's just for him to do his business.
  • I work in north melbourne and would like to stick to the inner west area if possible.

Is it possible at all? I just want to stop paying rent, really. Let me know if there's more info I can provide or anything else I've missed out. Thank you for your time!!

*edit - if buying a house is just off the cards right now, what would you do with the money? it's just sitting in an ing maximiser at the moment. i just have anxiety that im not doing the best with my resources.

Home & Garden

Comments

  • PissLUR on 14/08/2020 - 11:52
    +1

    whats your residency status?

    • Shepard on 14/08/2020 - 13:06

      it's a bit complicated right now. I'm a dependent of my father who came here on a student visa then skilled migrant. he managed to get sponsored but the company extorted us for money to keep the sponsor status but we just reported them to immigration and have been waiting in limbo for their verdict for the last 3 years.

      • Hardlyworkin on 14/08/2020 - 13:14

        I hope he is going to do something about this. Recoup the money at least.

  • [Deactivated] on 14/08/2020 - 11:54
    +10

    It all depends on your visa status. If you are permitted to purchase any freehold then your next hurdle is a loan.

    Based on a $3600 per month income, you can probably comfortably repay $1,500 after you pay your living expenses, income tax, rates, etc.

    With $80k capital, I think you should be okay for a property around the $400k mark as your loan will be about $320k for a repayment of $1,500 per month.

    (I have NFI about northern and western suburbs.)

    PS. I wouldn't do the above if I were you. You'll be stretched so thin and have no contingencies that you'll be forcing yourself into a corner. You won't dare take risks, you can't afford to piss anyone off and you'll have to pray hard the property prices do not drop, the job market is good… You'll end up like those people blame the system.

    There's smart risks and then there are bets you cannot afford to lose yet have no control over. This is the latter.

  • [Deactivated] on 14/08/2020 - 12:12
    +4

    Only thing that actually matters is being able to meet the repayments every month.

    Wanting roommates to help cover your mortgage, bad idea

    stick to the inner west area
    Not with that budget🤣🤣🤣

    Possible, kind of, good idea umm…

    • Shepard on 14/08/2020 - 14:19

      would it not be akin to renting your property out? except that you live in your own house?

      • Quantumcat on 14/08/2020 - 14:42

        You'll have trouble finding anyone over the summer, and generally just more risky as people might move out with little notice. If you are renting the room just for some extra spending money and not relying on it to be able to pay the mortgage that's ok. Then having someone in the other room is a bonus.

      • [Deactivated] on 14/08/2020 - 14:43

        Yes but people who houseshare dont care about your mortgage, they have their own things to do and priorities.

        Expecting to have quality people living there 12/12 months a year, to help cover your mortgage repayments, is craziness

  • o53djz7qTPY4der on 14/08/2020 - 12:34
    +11

    Hold onto your 80k in case you lose your casual job.

    • stirlo on 14/08/2020 - 13:18
      +2

      Or your visa…

  • jimbobaus on 14/08/2020 - 12:43
    +5

    being in Casual employment regardless of time with the company etc is going to be your biggest issue.

    • stirlo on 14/08/2020 - 13:17
      +2

      I'd say the Visa issue is bigger. Without residency can you even get a loan to buy property? Casual employment is also a massive deal but residency is the bigger one.

      There's no guarantee the immigration department will see the "extortion" the same way as OPs family does and he may lose his visa entirely.

  • Hardlyworkin on 14/08/2020 - 13:20
    +5

    It's a great time to rent in the inner city. Pay low rent for a year, see what the market does and if your personal situation and guaranteed work improves the reassess in a year.

    I don't think the benefits of buying a house now in your circumstances outweigh the risks.

  • bloom on 14/08/2020 - 13:39

    I don't really have anyone I trust to speak to so I thought to ask my Ozbargain fam.

    There’s your first mistake.

    • Shepard on 14/08/2020 - 14:18

      could you be more specific?

      • bloom on 14/08/2020 - 14:47
        +1

        Seek professional advice on a house, not the internet

        • Shepard on 14/08/2020 - 15:41

          that's good advice. im just trying to sus out my free options first. for example with everyone's responses, it doesnt really make sense to pay for a consultation at this point i feel.

        • [Deactivated] on 14/08/2020 - 15:49
          +9

          If getting advice from OzBargain is a mistake, then your advice to seek professional advice is a mistake as it is advice from OzBargain.

  • [Deactivated] on 14/08/2020 - 15:04

    Goodluck lol, living out in woop woop if you only have that much or some real small tiny place like an apartment or unit

  • dasher86 on 14/08/2020 - 15:28
    +1

    Honestly OP - you would struggle getting a home loan approved on $900 a week ($46.8k pa) - Before tax or after tax?
    You would also struggle finding a two bedroom 'house' in the inner west (i'm going to stay <=10km CBD) for under $500k.
    It's hard enough finding a two bedroom unit/flat for under $400k
    You should focus on increasing your income in the coming year and reassess.

    • Shepard on 14/08/2020 - 15:39

      900 is after tax. thank you for your input!

      • dasher86 on 14/08/2020 - 15:51

        no worries.
        it got me curious about the area so i looked on domain to see what i could find around west.
        Suburbs like Albion and Sunshine West will probably be as close as you will get <under 15km from the CBD, but still only a flat/unit.
        Something like this would be good to aim for.
        https://www.domain.com.au/18-20-talmage-street-albion-vic-30…
        You will need to increase your income by $10-12k per annum to be able to get this to stage though.

        On your income you will probably be able to afford to borrow $300k - don't forget about buying costs.

  • AssamLaksa on 14/08/2020 - 16:13
    +1

    Speak to a mortgage broker. You don't have to pay any fees to have a chat with one. They'll be able to best advise you on your financial position on what kind of property you are able to afford or if you are able to afford any at all.

    We had a really good mortgage broker who helped us understand the whole process when buying a property, and they don't charge you at all (they earn commission from whichever bank you end up taking a loan from)

  • Trying2SaveABuck on 14/08/2020 - 16:48

    Go for it man

  • miwahni on 14/08/2020 - 23:16

    If you don't have permanent residency then it's unlikely you'll find a bank that will lend to you, unless it's under their non-resi policy which is usually pretty tight re LVRs etc. Your best bet is to talk to a broker and spell it out for him/ her. They should be able to advise you which banks might look at your situation based on your visa type. I know this sounds like hackneyed advice but this is an area where banks can differ greatly in policy.

  • Navanod66 on 15/08/2020 - 08:22
    +1

    Hi fellow Sgean,

    There are many sound advice from the OzBargain fam above. Too much uncertainty and possible bargains at this moment, but you may not be well positioned to take advantage of it.

    Are you on the SG kongsi FB group by any chance? They can prob refer you to an experienced broker familiar with migrant issues. A certain Steven P. is quite active in that circle.

    Best of luck.

  • Myone888 on 15/08/2020 - 08:48

    Don’t forget to add in stamp duty and legal fees, about 10% of purchase price.
    For future if you do sell, think of the real estate fees maybe $5-7k

  • saltypete on 15/08/2020 - 09:11
    +2

    Keep saving for a while longer. You will be in a better financial position and housing is not going up in the next 6 months or so. If you can add information to your visa application it may be worth telling them about your savings and that you are looking for a secure residency status to buy.
    With a low wage and casual employment, your best investment at the moment would be in yourself, look for subsidised training that is going around during COVID. Make sure that your written and spoken English is good. Get govt financial fundamentals training, don’t go to free seminars…..
    While your savings are not doing much, they are safe. Higher yield will expose you to risk, there are going to be plenty of ‘high yield investments’ coming along in the next few years to suck people in.
    I wish you well and hope that you are able to get permanent residency.

    • popsiee on 15/08/2020 - 09:55

      Just a though what if Oz is Covid free by Xmas , some oversea's countries with one in particular will be after the high end properties :)

  • OzHunterNSW on 15/08/2020 - 09:45

    Wouldn't you wait for full citizenship?

  • Chase8 on 15/08/2020 - 10:15

    Go see three to five mortgage brokers and get advice there. Consultation is free.

    But also think logically afterwards. The downside of waiting is so low. The upside is also so low versus the risk.

  • joeyrr on 18/08/2020 - 00:48

    First, get a permanent visa.

  • Mi5T on 23/08/2020 - 21:38

    I'll preface this with saying that I don't think you should invest in a property at this time

    if you don't have residency status then you'd need to pay 12% stamp duty in total as a foreign investor, then you'd also need to put a downpayment down which would be about 20% in order to not have to pay LMI. (I'd advise talking to a mortgage broker as those above have mentioned to get an idea on what kind of borrowing rates you might be expecting to get for the mortgage)

    If you buy land then you'd only pay stamp duty on the land as opposed to buying an established property in which case stamp duty applies to everything. (ie. 12% on a $400k land purchase vs 12% on a $800k already built home) I think there are limitations on how long a foreigner can hold onto a piece of land without starting plans to build so you'd need to look into that as well

    as a foreign investor you'd also need to get approval post a foreign financial review board application (not sure the exact name of this) which costs about $5000 I think.

    so over all you need to have a fair amount saved in order to go ahead with a purchase.

    if you purchase land then you minimize the amount of stamp duty you need to pay but you'd need to make sure you have enough funds to fund a build in the near future

    now if the price of houses and land falls significantly in the next few months due to economic downturn and you've been able to build up more cash savings, then perhaps it'd be worthwhile to purchase a house or some land with plans to build soon, as the money dished out initially for the stamp duty will theoretically be recouped in the next few years in the equity of the home as prices should recover. economic downturn cuts both ways though as it could mean job instability for yourself as well

    for that reason, unless you have significant savings AND are sure of your job security, it's not something I'd recommend even if the market has a down trend

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