How first-home buyers can make 2016 their year

Over the past couple of years it’s been a tough time for new home buyers to get into the market. Is 2016 going to bring any relief?

This depends on what your goals, current situation and strategy are. Not everyone is in the same situation, so tailor your strategy to your needs.

Already, real estate agents are approaching me to find buyers for their listed properties – this is a tell-tale sign that the market has slowed down, so first-home buyers are going to be less likely to get taken for a ride and overpay for a property. It also means you have more negotiating power.

I’d expect this flat-lining in activity to continue into 2016. We may see prices go slightly up or down, but generally it won’t get too exciting. This gives buyers a bit more ease coming into it, as they don’t have to rush into the market for fear of being locked out of it.

Unfortunately, Sydney will remain expensive.

Even if the market corrects itself and Sydney prices go down slightly in 2016, the truth is prices will still remain very high.

For most people purchasing a dream home in the dream suburb is simply going to be unaffordable and unachievable. If you do buy your dream home, it will likely come at the expense of your lifestyle.

First-home buyers have three choices in 2016.

Firstly, you could buy the property of your dreams and potentially face financial stress.

Secondly, you could buy a property of your dreams in another location. You could move further away, you may even consider jumping to another state like Queensland, where property prices still remain affordable.

Or thirdly, start by building an investment portfolio, building your wealth through property investing and purchasing in your dream suburb in the future.

If you are going to dive right in and purchase your dream property in 2016 then ensure you don’t buy on emotion.

You don’t want to pay too much for a property just because you have become emotionally attached to it. Be smart, learn the skill of negotiation and get as much money knocked off the price as possible. Don’t get too attached to the outcome and be prepared to let it go if it doesn’t fall within budget.

Try to purchase a property that is under market value and has potential for capital growth. This will give you more options to invest the equity in the future and secure yourself for retirement.

Build a team around you – tell your accountant, financial planner and broker what your goals are for now and into the future so they’re able to give you advice not only based on your current situation but also on what you’re wanting to accomplish. Just keep in mind that in order for them to give you the correct advice they need to have helped people achieve the goals you want to achieve.

Be smart with your finances. Have a strategy in place for now and the future, surround yourself with the right team and don’t over extend yourself so you’re not sacrificing your lifestyle too much.

Nathan Birch is the co-founder of property investment group Binvested.