AS SEEN IN THE DINGLEY DOSSIER
Latest statistics from RP Data list Dingley Village as having a population just over 10,000, with 87% of homes owner occupied. March 2016 marks the 21st anniversary celebration for my family and I as residents of Dingley Village. The large number of locals who have been here longer than us is testament to this great quality of life, it is indeed a great place to buy a home and raise a family.
What about the next generation? As our children leave our homes and start a family of their own it would be great to think they would have the opportunity of also buying in the local area, however with the median house price now $611,000 that is a challenge!
Parents can help their children in a number of ways. First and perhaps most important is imparting some wisdom learnt by experience – schools do not adequately teach money management skills. Some suggestions for discussion:
Budgets. Yes a dirty word for many, however an essential part of planning a major commitment such as buying your first home. Your mortgage broker / bank will need to know your living expenses as part of putting together your loan application, importantly if you do not know your own budgets, how do you know you can afford to repay the loan?
Spending. Younger generations expect a far higher standard of living than older generations were raised to expect. This has implications in credit card debt and car loans outstanding. Credit for fun is easy to obtain, but hurts the ability to buy a home.
Saving a deposit. Deposits are essential, starting small is OK, just keep adding to it. You must prove the ability to save!
Affordability. The first home you buy will not be the dream home, be prepared to compromise on living standards to get a foothold on the property owning ladder. Buy the home you can afford now. First home buyers should consider buying a property with potential, discounted in price due to neglect by previous owner. Whilst it is never as easy as the TV shows portray, equity can be added with weekend elbow grease.
Parent assistance. One bank representative recently estimated at least 1/3 of first home applicants are currently being assisted by parents and grandparents. Family guarantees involve supporting the children via equity guarantee with no cash flow cost to the parent, but please note there is a huge difference between banks in this area, you must see a broker. As property prices continue to rise family guarantees are increasingly required to overcome deposit issues. With a combined effort, perhaps our children can stay in the area!
Note: Integrity Finance Australia run occasional First Home Buyer education seminars in our Dingley Village office, please let us know if you are interested in attending.