Where to buy my first home

If a good saver looks slightly fur­ther out, he should find an af­ford­able prop­erty that suits his needs

Money Magazine Australia - - ASK THE EXPERTS -

NAME: David Pur­die

STA­TUS: First home buyer.

QUES­TIONS: What are the af­ford­able, up-and-com­ing sub­urbs of Bris­bane where I can buy a house for $450,000 to $500,000?

AN­SWERS: Buy a free­stand­ing house si­t­u­ated in an area that can pro­vide com­mu­nity and amenity and cater for a good lifestyle. There are some fab­u­lous sub­urbs in your price bracket such as Cherm­side, Zillmere and Banyo. Keep your money in cash and term de­posits as you will buy a prop­erty in a year or so. Keep an eye out for the pass­ing of the govern­ment’s leg­is­la­tion to al­low first home buy­ers to save for a de­posit within their su­per fund – the First Home Su­per Saver Scheme – which could be fi­nan­cially ben­e­fi­cial.

David Pur­die is on track to have a 20% de­posit for a house in Bris­bane by early next year. The 27-year-old, who will re­ceive his per­ma­nent res­i­dency at the end of the year, has a good full-time job in tech­nol­ogy sales. He is a keen saver who keeps his ex­penses low and doesn’t have any debt.

David would like to buy a prop­erty, prefer­ably a house, that is within a 10-kilome­tre ra­dius of the cen­tre of Bris­bane in the $450,000 to $500,000 price bracket. He wants a min­i­mum of two bed­rooms and will live in it. He is pre­pared to buy a fixer-up­per but not a dump.

But the Bris­bane prop­erty mar­ket – par­tic­u­larly apart­ments – is patchy. Apart­ments are un­der pres­sure from an over­sup­ply. If David avoids buy­ing an apart­ment, what sort of house should he buy? What are the up-and-com­ing Bris­bane sub­urbs that he can af­ford?

What sort of an­nual growth (or over, say, a decade) is rea­son­able to ex­pect in the Bris­bane mar­ket?

David has $10,000 in­vested in an ex­change traded fund, Van­guard Aus­tralian Shares In­dex, which tracks the S&P/ASX 300. He would like to buy the Van­guard Aus­tralian Prop­erty Se­cu­ri­ties In­dex ETF. “My knowl­edge of in­vest­ing is quite low,” he says. “My ques­tion is where should I put my money? Should I con­tinue in­vest­ing in shares un­til I can buy a prop­erty, in­crease su­per or per­haps some­thing else?”

David has all his in­surance or­gan­ised, with life, TPD and salary con­tin­u­ance cover. He is in an IOOF su­per fund and wants to bring out his UK pen­sion, then merge it with his Aus­tralian pen­sion. Is there any ad­vice on how to do this as the rules have re­cently changed?

Should I con­tinue in­vest­ing in shares un­til I buy, or in­crease su­per?”

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