The Home Ownership Lies We Don’t Realise We’re Believing

As a millennial, the thought of stepping into the property market is daunting. We’ve all heard about the astronomical prices of Sydney property – from literally every media outlet – so it’s no wonder we’re apprehensive to finally start doing such an ‘adult’ thing.

To make matters worse, there’s so many people commenting on the issue that we have no idea where the noise begins and ends, so we tend to just pick up the things that we hear the most often. The result? Us homebuyer newbies tend to believe a few lies about the property market, which could potentially set us up for failure.

Who should we listen to? How can we minimise risk? How can we distinguish fact from media hype? And how are we meant to navigate the homebuying journey with little or no prior experience?

Here, we dispel some of the myths.

If you’ve got the deposit, then you’re ready to buy

Many home buyers are terrified about the idea of a 20% deposit – and with good reason. Every second Instagram account is posting quotes about how much money we don’t have.

It may be tempting to think that if you’ve got your financials in check and saved up a bit, you’re ready to be a homeowner. But, it’s not that clear-cut.

And the bank won’t have the same resolve. In fact, the complete guidelines are pretty extensive.

Aside from your financial position, you need to think about your current and future lifestyle. How’s your job security looking? If you haven’t been in the same job for the past 12 months, lenders may make you jump through hoops to demonstrate that you have a stable source of income. Yes, it’s a pain to organise and there’s so much Netflix to catch up on, but you need to get yourself sorted.

This boils down pretty extensively – for example, if you’re set on having kids or if you’re the wanderlust type, it’s going to be harder to pin down that deposit because your financial attention is everywhere but nowhere – kinda like our social lives, except money.

I pay for what it says on the box

The upfront costs of home ownership may be fairly straightforward, but people often overlook the indirect or hidden costs associated with buying real estate.

Even if you’ve budgeted for stamp duty, pre-purchase inspections, lender’s mortgage insurance (LMI) and legal fees (we’re looking at you, high school Dean’s Award students), it’s harder to budget for indirect costs. These include maintenance, strata levies, removalist costs and council fees. Not to mention the hidden search costs of buying property, such as petrol.

It’s pessimistic, but it’s also about being prepared for the unexpected.

Get in while it’s hot

Lies. Many people are poorly advised to purchase in a ‘hot’ market that has recently experienced high property price growth. While it may seem obvious that ‘what goes up must come down’, many homebuyers don’t realise that buying during an upturn may not be the best strategy in terms of benefiting from capital growth. That’s grown-up speak for “If you buy it for a high price, it’s going to be hard to sell it for even more.”

The reality is that every market is different, and your primary focus should be on your internal financial sitch. Sure, the market might be ready, but if numero uno isn’t, it’s straight up a bad idea.

Just eliminate emotion

We’re all familiar with the ‘rule out emotion’ paradigm, but don’t kid yourself. Purchasing a home is an emotionally-charged event and it’s near impossible to remove emotion from your decision-making.

One of the greatest emotional blunders of buying real estate is harnessing an overarching sense of optimism– we tend to think that everything will work out in our favour.

In this scenario, it’s valuable to periodically adopt the pessimistic mindset of that 35-year-old Aunty of yours that smokes menthols and sits in the corner of family gatherings with a bottle of cheap rosé.

The key word in this last piece of advice is ‘periodically’. The good news is that while our generation is more afraid of ‘adulting’ than ever before, we’re also pretty dang smart. You’ve got the tools at your disposal, the gusto to ace your deposit interview and you now know some of the biggest pitfalls and myths to home-owning success, so just get out there and seize it.