Login
Beware of bargains: FHBs must stay firm on property fundamentals
First home buyers should make sure the fear of missing out doesn’t take over the purchasing process, and keep the fundamentals in mind to avoid making a poor property decision.
While first home buyers have been priced out of properties across the country, Brisbane has presented an even greater challenge due to its rapid price growth.
Buyers in Brisbane have faced a tight property market driven by rising prices over the past five years, while dwelling values have climbed by 87.2 per cent, according to Cotality’s recent Home Value Index.
In the River City’s competitive market, Tailored Buyers Agents co-founder Amelia Reddiex said first home buyers should focus on finding the right property rather than jumping at the first opportunity.
“When markets run hot, it’s easy to make the wrong compromises in order to secure a property at what feels like a bargain price, but a bargain property is rarely cheap,” Reddiex said.
“Buying a small low-quality unit in a poor location, such as on a main road or in an area with limited amenities, will come back to bite you.”
“Now more than ever is the time to focus on the fundamentals.”
Reddiex said buyers should focus on suburbs near highly sought-after locations, in the hope of securing access to amenities without the higher price tags.
“Location remains paramount, but buyers need not pay a premium for the most desirable addresses.”
“Suburbs adjacent or very close to Brisbane’s most sought-after postcodes offer excellent amenity and infrastructure for considerably less.”
She said the suburbs most likely to provide a strong starting point for first-time buyers in Brisbane were Gaythorne, Nundah, Everton Park, Kedron and Morningside.
Once identifying an area to purchase in, Reddiex said first-time buyers should consider properties in need of a facelift to secure value as property prices continue to rise.
“Units requiring a freshen up, like a new kitchen, bathroom, paint or flooring, can deliver outstanding gains.”
“Manufacturing equity through upgrades is one of the most effective strategies for first-time buyers in a high-priced market.”
While units may offer an easier path to property ownership due to their lower prices, Reddiex said buyers should avoid one-bedroom dwellings.
She said that, particularly in Brisbane, the resale of one-bedroom units was “notoriously challenging”.
“With more Australians working from home and demanding storage and flexibility, one-bedders are volatile assets that tend to underperform, especially in softer market conditions.”
Additionally, Reddiex said buyers should consider older walk-up complexes, as they may benefit from renovation work and potentially lower strata fees, resulting in lower ongoing costs for owners.
“Smaller walk-up complexes typically have fewer body corporate facilities, keeping levies low and running costs manageable.”
“Always, however, have a solicitor review body corporate meeting minutes and commission a thorough building inspection before proceeding.”
For those who were unable to purchase a property in the area they wanted to live, Reddiex said rentvesting was a viable strategy.
“It’s not a one-size-fits-all approach, but for many buyers it is the smarter path to building long-term wealth.”
“Your first home doesn’t need to be your dream home, but it should be a smart first step on the way to it,” Reddiex concluded.