Five tips for saving for a house deposit at a time of record-high house prices By Melissa Jenkins

Isn’t there a saying … never do business with friends and family?
Five tips for saving for a house deposit at a time of record-high house prices     By Melissa Jenkins
Well, one property expert believes many Australians will have no choice but to break that rule in coming years, if they have any hope of breaking into the property market. 

Residential property prices have soared more than 18 per cent nationally over the past 12 months, according to the latest figures from property analytics firm CoreLogic. 

That equates to an annual jump of $103,400, or a weekly rise of $1990, at a time when wages are growing at just 1.7 per cent per year. 

Buyers agent and Solvere Wealth director John Pidgeon said prices were rising so quickly that aspiring home owners might want to consider joining forces with other buyers to get a sale over the line. 

As prices rise at their fastest annual pace since the year ending July 1989, it was one of several deposit-saving tips he shared with TND. 

1. Get out of debt and build an emergency fund first 

First up: Pay off any debts. 

Mr Pidgeon said if you’ve got credit card debt, a car loan or other types of consumer debt, get rid of it before you think about saving for a house. 

“It’s great to have $20k in savings but if you’ve got $15,000 in credit owing then it’s counterproductive,” he said. 

Also ensure you’ve got an emergency fund well established before you start directing savings to a house deposit. 

2. Consider joining forces 

Mr Pidgeon predicts more and more Australians will decide to buy property with family or friends as a way to break into the market. 

“It’s actually the next phase of buying property in Australia because of the unaffordability crisis we’ve got,” he said. 

“People buying houses together to live in will be the new norm; in Melbourne and Sydney it’s already happening.” 

The median house price in Sydney is more than $1 million, according to CoreLogic. 

Mr Pidgeon said that meant a 20 per cent house deposit – $200,000 – was an unattainable amount for many people to save within five years. 

“They (would-be home buyers) have to pull out all stops and get creative about what is the best option,” he said. 

“Fifty per cent of something is better than 100 per cent of nothing.” 

If you do decide to buy a house with family or friends, agree on certain check-in points before you buy the property – say after years one, three and five of ownership – to address your future plans, Mr Pidgeon said. 

3. You have to make sacrifices 

It’s a good idea to talk to a mortgage broker after you decide you want to buy a property, as this will give you a clearer deposit savings target. 

Mr Pidgeon said many people who want a house deposit are unwilling to consistently give up their daily luxuries, which can add up to a significant amount over time. 

“The biggest thing I see is people not prepared to make sacrifices; they still want to go out for their dinners and have their coffees and do all that but also have a house deposit,” he said. 

“Thinking that one coffee won’t make a difference … it doesn’t seem much, but it adds up over time.” 

4. Earn extra cash 

Aspiring home owners can boost their savings by selling unwanted items through the second-hand economy. 

They can also ask their boss for a pay rise, or consider changing to a job with a higher salary. 

5. Get a buddy 

It’s also worth enlisting the support of a family member or friend who is also chasing a big savings goal. 

Theirs doesn’t have to be a house deposit – maybe they want to smash debt or save for a trip (once we can travel again) – but the main thing is if you pair up with a buddy you can keep each other accountable. 

There is one way to save tens of thousands on costs and charges 

Real estate agents, property owners, developers, builders and investors can now present land, residential, house & land packages, commercial and business properties for Sale, Lease, Swap or Investment 100% Free. 

At SSB there are no registration costs, no listing,  no marketing fees and no monthly or annual charges including zero costs for multi REAXML upload listings. 

A further value benefit significantly increases brand awareness, market reach and client capture connecting directly with buyers, investors, tenants, sellers and swappers worldwide. 

Buyers and renters benefit considerably from the competitive savings owners and agents can pass on to you. 

SSB is not an agent, reseller or lead generator, we are an Australian owned Melbourne based FREE service providing you with an additional online channel that enhances your current marketing campaigns adding significant market reach, exposure and capture potentially  adding value to income streams by connecting you directly with owners, investors, developers and buyers. Have a look it really is 100% cost free at  (SSB).