Finding affordable housing: Tips to secure a home within your budget
Due to skyrocketing prices and limited availability in key areas, Australia’s housing market has become increasingly challenging for mid-to-low-income earners. However, with careful planning and resourceful strategies, it is still possible to find affordable housing. Whether you’re looking to buy or rent, here are some practical tips to help you navigate the housing market and secure a home within your budget.
1. Do your research
Before starting your housing search, it's crucial to understand the current state of the market. Websites like Domain and realestate.com.au offer valuable insights into market trends, median house prices, and rental costs in different locations. By staying informed, you can pinpoint areas where housing is more affordable and align your search with your budget.
2. Don’t rule out the outer suburbs and regional areas
While living in the heart of a major city might have broad appeal, it’s often not feasible unless you’re a high earner or willing to live in a small space. Broadening your search to the outer suburbs of major cities or regional areas can greatly improve your chances of finding affordable housing.
3. Understand what Government assistance is available
The Australian Government offers several programs that may help you to secure housing, including:
- The First Home Owner Grant provides a one-off grant to help purchase a new or substantially renovated home. The amount and eligibility criteria vary by state or territory, so checking with your local state or territory government is important.
- The First Home Guarantee program allows eligible first-home buyers to purchase a property with a deposit as low as 5%. The government guarantees the loan, reducing the need for lenders’ mortgage insurance.
- If you’re receiving income support payments, you might be eligible for Commonwealth Rent Assistance, which can help reduce the cost of rent in the private rental market.
4. Consider sharing
Shared accommodation can be cost-effective, particularly for singles or young couples. Renting a room in a shared house or apartment reduces the cost of rent, utilities, and other living expenses. Living with others can also provide a social support network, which can be especially beneficial if you’re new to an area. Flatmates is an excellent resource for finding shared accommodation.
5. Negotiate
In a competitive market, it can be easy to assume that prices are non-negotiable. However, there’s often room for negotiation, especially if the property has been on the market for a while or if the landlord or seller is motivated. For renters, when negotiating, it’s helpful to provide evidence of comparable properties in the area with lower rents. For buyers, be prepared to make a reasonable offer based on your research of the local market conditions. The worst that can happen is that you don’t get what you want, but it’s worth a try.
6. Look for properties that need some work
Properties that need a bit of TLC are often more affordable than homes ready to move into. If you’re willing to invest time and effort into renovations, you could purchase a property below market value and increase its worth over time. An added benefit of this strategy is that you’ll pay less stamp duty for a home with a lower value. You can also apply this strategy when looking to rent by offering to, for example, paint the interior or lay new tiles in exchange for reduced rent.
7. Maximise your savings
Maximising your savings is crucial when looking for affordable housing. A larger deposit can help reduce your loan-to-value ratio, potentially leading to better loan terms and lower interest rates. To save more effectively, consider reducing discretionary spending, avoiding unnecessary debt, and taking advantage of government incentives or bonuses.
8. Be flexible
It's essential to be flexible with your housing requirements, as being too rigid can limit your options. Identify the non-negotiable factors and areas where you can be flexible, such as location, size, or number of bedrooms. You may find more affordable options that meet your essential needs by being willing to compromise.
9. Talk to a broker
If you're looking to buy, a mortgage broker can assist you in navigating the complexities of home loans, finding competitive rates, and identifying lenders that cater to your demographic. They typically have access to a wider range of loan products than you might find on your own, and they can help you understand the long-term implications of different loan options.
10. Be patient - and persistent
Finding affordable housing can be a long and challenging journey, especially in today's competitive market. It's essential to remain patient and persistent, keeping your long-term goals in mind. Regularly review your strategy, stay informed about market conditions, and don't be discouraged by setbacks. With the right approach, you can find a home that fits your budget and provides a stable foundation for your future.
Final thoughts
To find affordable housing in Australia, you must thoroughly research, stay flexible, and plan strategically. Consider a broader range of locations, use government programs, and be open to different housing options. Navigating the housing market challenges will help you secure a place to call home.
And always remember, if you need financial assistance during your housing journey, we’re always here to help. Check out our cash loans up to $5,000 to find out how quick and easy it is to access some extra funds. Once a loan is approved, the cash is usually in your bank account within a few hours - so you can stress less and focus on finding your new home.