Free online tool can be used to track ripple effect

The new first home buyer guide, launched by the Real Estate Institute of Victoria (REIV), highlights the average weekly repayment required to buy a home across Melbourne, Ballarat, Geelong and Bendigo. Users can navigate the map to target suburbs and dwelling types according to their budget.  

The comparison of income, house prices and mortgage repayment in an area can be used to find equity and determine where people will want to buy next, Sam Saggers told Smart Property Investment.

“To fuel economic growth, a market needs to be bearable, equitable and sustainable in order for both investors and owner-occupiers to purchase there,” Mr Saggers explained.

“[If] incomes are relatively good and house prices are relatively low, there is ability for that particular house area to grow in value.”

If the home prices become ‘less bearable’, people will have to buy elsewhere, which will trigger a ripple effect.

According to REIV CEO Enzo Raimondo, the guide captures a comprehensive picture of all the costs of buying a property.

“The guide presents a realistic appraisal of the actual cost of buying by taking into account all the costs; conveyance fees, stamp duty and mortgage insurance. The benefits enjoyed by first home buyers; lower stamp duty and the First Home Owners' Grant are also taken into account,” Mr Raimondo said. 

“The guide also assumes the buyer has a 10 per cent deposit and an interest rate of 6.4 per cent.

“As the data is based on median prices it is important to note that homes will be available for less and more than the median, as it is simply the middle sale in the series.

“The guide also takes into account the 30 per cent lower stamp duty paid by first home buyers.

“Market conditions provide excellent opportunities for first home buyers this year, interest rates are at historical lows and prices remain below their peaks,” Mr Raimondo concluded.