Five Top Tips For First-Time Buyers in Sydney’s Eastern Suburbs
Many first-time buyers have all but given up on Sydney’s eastern suburbs, but there are still strategies you can use to buy property in the neighbourhood you truly want.
What does it take for a first home buyer to find property in Sydney’s eastern suburbs? The fact is there are still opportunities to buy in these sought-after neighbourhoods, even with lower supply, rising prices and tough auction competition.
Here are our top five tips for first-time buyers with an eye on Sydney’s east.
1. Focus on location, not size
The reality of what first-time home buyers can afford in suburbs like Paddington or Woollahra can be disheartening. Detached homes are out of reach for many buyers entering the market for the first time.
The fact is that apartment living is the new normal in Sydney’s east, and there are plenty of advantages. What buyers lose in terms of space they often gain when it comes to location, views, lifestyle and added security.
2. Consider the ‘rentvesting’ strategy
Renting a property in your ideal suburb after buying and letting out a place in a neighbourhood that matches your budget is a smart way to get a foothold in the property market. If you can make sure the rent you charge covers your mortgage repayments and other maintenance costs, you’re well ahead of the game.
This ‘positive gearing’ setup gives you breathing room to build equity in your investment property, which you can eventually sell in order to give your next deposit a boost. In the meantime, you have the chance to road test the area where you one day plan to own.
3. Consider Surry Hills for location, Randwick for cost
For many younger buyers keen to maintain a city-centred lifestyle, Surry Hills is the obvious choice. With more high-density housing than surrounding suburbs, it offers plenty of options for those who are willing to compromise on square footage rather than location.
At the other end of the spectrum, fast-growing Randwick or Kingsford are high on the list for buyers who need more room to move but can’t stretch their budget to buy right next to the city. These buyers know the extra distance won’t matter much in a few years, with the introduction of light rail linking Randwick and Kingsford straight to the CBD.
4. Come to auctions better prepared than the competition
Research and preparation will always pay off on auction day. Bidders who are ready with their deposit, home loan pre-approval, a set budget and ideally some experience at auctions have the upper hand. They know when to stand their ground, but won’t let emotion push their bids above a reasonable level.
If you’re not ready to start bidding at auctions, there’s still plenty you can do to prepare. Research sold price trends in your target neighbourhood, be there to watch auctions, talk to real estate agents and gather the support and expertise of people like mortgage brokers, building inspectors and even real estate savvy friends and family.
5. Decide on your non-negotiables (but be ready to compromise)
This is the most important point to remember, whether you’re aiming for a unit in your ideal suburb or buying further out with ‘rentvesting’ in mind. Our advice is to focus on finding that ‘six out of 10 property‘ earlier in your property hunt, rather than holding out for months (even years) to finally find something that meets all your requirements.
Decide on your own list of non-negotiables, but we’d advise against compromising when it comes to factors you can’t change such as the location of the property or its outlook over the surrounding area. These will become your strongest selling points when it comes time to move up the property ladder.