So there’s been a turning point with my stay in Australia, I have dipped my toes in the Melbourne housing market. Oh, Australian real estate… Now, by dipping my toes I mean, I have begun to save, my lists, budgets and most excitingly – dream.
The biggest challenge at this point has been adjusting my tastes and dreams to those that are more realistic in the Eastern suburbs of Australia as opposed to the small town Iowa. The most difficult being the price change. A house of similar stature in Iowa may cost at max $200,000 USD and that same house in the area we are looking in is $600,000 plus. We are a good hour away from the heart of the city as well. This does change things. When it comes to budget I could be ready to put a down payment on a house where I am from but I am a solid year away in Australia.
I’ll get more into numbers in a moment, but there are some more intriguing or even fun differences that I have had to adjust my thinking for.
Rooftops! I have actually been apart of re-roofing my childhood home (and a few family members) twice in my life. I once thought, someday when I own my own home – I may just surprise my future husband and friends with how much I know when it comes to the process. This is no longer the case. Here is Australia we get the choice of either roof tiles or a tin roof. Now, my better half, an Australian native, enjoys the tin roofs because of the sound rain makes. For me, and what I grew up knowing, tin roofs only come on barns. My first home, I never imagined would have a tin roof – it just seemed very strange. At first I was a definite no, I wanted my first massive purchase to be something I was proud of and I wasn’t sure where “tin roof” fit into that. As a few months have passed, we have found a compromise. I enjoy the dark grey and darker blue tin roofs but I am still an affirmative no when it comes to a green, red or white tin roof. I think both of us have decided roof tiles aren’t our favourite but not a deal breaker by any means when it comes to our final decision on buying or not buying a house.
Another strange difference are basements or the lack thereof. One thing I really enjoy about basements, or have grown to realise I miss, is the benefit of extra space for a rumpus room, lounge, bedrooms and laundry. They don’t exist here as far as I am aware – at least I haven’t seen or heard of a house having one. This means either less space, longer houses and what seems to be more expensive houses. The plots I have seen are significantly smaller than the average back in Iowa – a definite feature I miss.
I do enjoy that there are many more houses that are brick or render as opposed to weather board. As a young adult, I always imagined that owning a brick house would be a huge accomplishment. Something about brick seemed more prestigious to me than weatherboard – purely just my imaginative mind.
Carports are another thing I wasn’t quite used to as well, this I am sure is more of my small town Iowa childhood as well. I just didn’t see them as much so I always imagined having a garage. Eliminating a garage from the price tag of a beneficial house may be necessary. Good thing I have a carpenter partner!
So, moving on, budget…
Before I jump in – an important thing about how my mind works – I overthink, I’m a planner and I stress about stressing. Don’t worry, not fanatically so but it’s still there 🙂
I won’t get into detail in regards to all of the factual things with loans and the first-home buyers benefit, etc. but an overview of the things I have picked up talking to our friends who are on the same journey.
We began saving about 6 months ago. We opened an account together that we could contribute to and get a bonus interest each month for not withdrawing any money – any way you can get a solid interest rate for the money you’re piling together is good. We have a goal of putting half of our monthly paychecks into this account. We are aiming to get to a 10% down payment by the end of this year (10 months from now). Keep in mind – there are additional costs that come with that down payment including fees, stamp duty, mortgage insurance, etc. So a mere 10% down payment won’t cut it.
Our outlook is – we get to the 10% down payment and continue saving until we find a house we LOVE – so not to rush into anything.
We both are competitive and enjoy challenges, so in addition to putting half our monthly paychecks into our house account, we are trying to save as much of the other half as possible each month (while still having a life). But where to save? Well, I work in the city, so being away from home all day with options all around for the world’s best coffee and delicious foods makes it tough to budget. However, I was able to cut my ten dollars a day on coffee to Italian Espresso Style Coffee Bags – a box of 28 costs 9 dollars at Wooly’s at the moment. This could end up saving me close to $1,500 a year. It gets better – it’s good coffee! Much better than instant and much less cheap than a couple cups a day in the city.
To couple that, we both enjoy cooking so making our lunches for the week each Sunday is an adventure too. We shoot for a different meat and veggies each week. But I challenge myself to not spend anything all day during the week – may be easy for some but has been a challenge for me at some turns.
I have also turned to where I could make money elsewhere. One “tip”, which I’ve just started. is to sell your old dresses on Carousell. These dresses I have sitting in the back of my wardrobe can go for $70 each – why not? Babysitting is another one that may earn some extra side money. There are plenty more available with the right research.
Now, if we could somehow get to a 20% down payment for our first house – roughly $100,000-$140,000. This would alleviate you from some of the mortgage insurances you are otherwise going to have to pay for.
As an Ex-Pat, I was also pleased to learn that with an Australian Citizen as my partner I still qualify for the first home buyer’s grant. In the big sum of things with buying a house it may be a pinprick but every bit counts right? There are interest rate discounts also still available from some lenders – it’s important to feel out all of your options. Talk to multiple banks, learn the differences between loans and lenders. Also, keep in mind that you can borrow up to 95%, my goals of 10% or 20% are not based on my limits. But keep in mind this all depends on the lenders – don’t take that to heart – go to the source. You can’t talk to an agent too soon, get yourself on their potential client list and seek their advice.
Buying a house is an exciting, challenging and scary process. At 26 years old I sometimes feel quite behind in comparison to friends but I’ve supplemented my tardiness in buying a house with some really amazing adventures (and student loans :().