Imogen Alexy bought her first home, a one-bedroom apartment in Glen Huntly, in Melbourne's southeast, in 2020 for $390,000 with a 5 per cent deposit. The now 29-year-old mortgage broker told Yahoo Finance she felt pressure at the time to get into the property market as quickly as possible and achieve the ‘Great Australian Dream’.
“I feel like I rushed it because I wanted to get my foot in the door and thought that it was a rat race. I thought if I left it until I was later in my 20s I was failing or missing out," she said.
While her apartment has gone up by about $100,000 in value, Alexy said she wishes she had waited and instead bought a house or bigger property in the outer suburbs with better capital growth potential.
She admitted she thought buying where she wanted to live was the only way to get into the market and said she wished she had looked at the long-term, rather than just the immediate, consequences of buying a property and considered rentvesting.
“I think I took the convenience factor over thinking about my future and I didn’t have someone in my corner,” she said.
“I wasn’t aware at this stage that there were other options and I could look at different quality properties, and that could set me up for success better in the future.”
Do you have a property story to share? Contact tamika.seeto@yahooinc.com
Alexy said she chose an apartment with a large balcony area and thinks this has helped with its value. (Source: Supplied)
After living in the property for two years, Alexy now rents it out for $350 per week and lives in nearby Glen Iris with her partner.
She is saving up for another property and said she would have loved to be in the position to use the equity in her first property if it had been bigger. Instead, she said it will now take her longer to save up a deposit.
A staggering 45 per cent of first-home buyers who purchased in the past year admitted they regret their decision, a new survey by Finder found.
The two most common regrets were paying too much for the home (26 per cent), followed by not saving a large enough deposit (11 per cent) and buying in the wrong area (10 per cent).
“This kind of financial risk-taking reflects not just ambition, but anxiety – the belief that if you don't buy now, you may never be able to,” Finder head of consumer research Graham Cooke said.
Alexy has called on other first-home buyers to do their research and consider all options. (Source: Supplied)
Aussies are also pushing their budgets to the limit, with about 14 per cent of Aussies who bought in the past 12 months saying they had no savings left and a third had less than $10,000.
Alexy said buying with a 5 per cent deposit was one aspect she doesn’t regret because it meant she still had a buffer in place and money for other investments.
The fact that she bought a cheaper property also meant she didn’t stretch herself too thin and was able to cope with rising interest rates.
Common ‘traps’ to avoid for first-time buyers
Little Real Estate executive general manager of property services Anne Crarey said there were a few common “traps” she was seeing first-time investors like Alexy fall into.
“Poor research, overestimating returns, and failing to plan for vacancy or maintenance costs are some of the most common issues that can turn a promising investment into a costly mistake,” she said.
Other frequent pitfalls include focusing on yield without considering growth, overlooking vacancy rates, letting emotion drive decisions, and overextending financially.
“Don’t go it alone. With the right advice and a clear strategy, you’ll be in a much stronger position to build a property portfolio that delivers results for years to come," Crarey said.
Little Real Estate Anne Crarey said there were a few common 'traps' first-time investors often fell into. (Source: Supplied/Getty)
Alexy said she would also recommend first-home buyers do their research and speak to experts in the industry to understand all their options.
“It’s really easy to get laser-focused on one idea and not necessarily consider all your options. I think that’s where buyer’s remorse comes into play a lot of the time,” she said.
“Stop comparing and slow down and realise that it’s our own journey, and whatever timeframe we have that’s totally ok. There's no rush to be buying your first home, the average first-home buyer is 36 now.”
Alexy said it was important to consider the property’s growth potential and plan ahead, even if you planned to live in it for the foreseeable future.
“It’s really uncommon that someone buys somewhere and is going to live in their first home forever,” she said.
“Most people, unless they have extenuating circumstances like massive gifts or huge deposits or really high incomes, have to use that first home as a stepping stone to get somewhere that they would like to live longer term.”
