Choosing to rent or buy is a big deal. Especially when it comes to your first home. And, while there's no one-size-fits-all approach, Perth's rental scene is dropping hints that buying your own home could be a more beneficial and sustainable long-term option.

Renting on the rocks

Ever walked by a new rental with a line wrapping around the block on open house day? If not, get used to this happening on the regular - it won't be slowing anytime soon. The Perth rental scene is in fierce competition mode, with a tight 0.7% vacancy rate since 2021, as reported by REIWA (Reference: REIWA, reiwa.com Rental Vacancy Rates, Dec 2023). With demand continuing to outweigh supply, and a balanced market typically ranging between 2.5-3.5%, you can expect intense competition to continue for the long haul (Reference: REIWA, reiwa.com Rental Vacancy Rates, Dec 2023). And with the uncertainty of finding a rental comes the uncertainty of staying put. According to a survey by Resolve Finance, 19% of investors are intending to sell their investment property over the next 12 months, while another 8% may opt for short-term, Airbnb-style rentals only (Reference: The Adviser, Borrower, 3 Jan 2024). So, staying in "your" home might just get a tad trickier. 

On top of the chaos of uncertainty and competition, let's add in costs. In the midst of a cost of living crisis, one could argue that diving into the rental market might not be the savviest move. According to December 2023 REIWA data, a rental home in Perth will set you back an average of $600 per week, while rental units hover slightly cheaper at $550 on average (Reference: REIWA, Perth Market Insights, Jan 14 2024). Looking specifically at the suburbs of Hilbert and Haynes - a 2-bed house rents for an average of $600 and $580 per week, respectively (Reference: Urbis, Hilbert & Haynes Market Outlook, Dec 2023). Go for a 4-bed, and you might pay less than Greater Perth's average, but it's still a hefty sum. And remember, you won't get this cash back - renting means no equity or returns on a property you don't own.

Buyers Bliss

Your own home equals total freedom. Always dreamt of a furry friend? Now you can have one. Gone are the days of landlord's rules in "your" home - because this IS your home. No more terms, extra fees or worrying about eviction. Tackling your mortgage means building an asset, not paying someone else's bills - it's personal satisfaction that you're opening the door for potential growth and long-term wealth. 

For first home buyers, buying your own home means you could qualify for the First Home Owner Grant - a cool $10,000 from the government to help with buying or building your new place (Reference: Government of Western Australia, Department of Finance, Dec 8 2023). Factor in costs like all that brand new furniture, and all these savings help. If you're building, go for packages that throw in extras like fencing, landscaping, or design upgrades - talk about bang for your buck.

And, with house prices continuing to climb, now's the time to get your foot in the door. In Hilbert, house prices shot up 9.5% over the last 12 months, well ahead of City of Armadale (1.2%) and Greater Perth (4.1%) (Reference: Urbis, Hilbert & Haynes Market Outlook, Dec 2023). In July 2023, the median house price was $460,000, only climbing since then as demand continues in the fast-growing suburb (Reference: Urbis, Hilbert & Haynes Market Outlook, Dec 2023). Waiting to save for a deposit? You might be left playing catch-up as house prices outrun your bank account savings.

First Steps   

The first (and most important) step - educate yourself. Make time to sit down with a professional and go over your finance options, before you fall into a deep self-pity spiral endlessly googling questions. While your bank may not have all the answers (and won't send you to a competitor who suits you better), a mortgage broker is free, and can offer the right information on which bank is the best option for you. A lot of our clients have worked with Resolve Finance, Westgate Finance, or Lets Finance to get you started, why not ask your own family and friends for personal recommendations too? Two important things they can offer advice on: 

1. Your Borrowing Capacity: what the bank will loan you based on what they think you can afford, accounting for income minus regular expenses.

2. Deposits: how much you need to have in your savings to be offered a loan. Some lenders need as little as a 2% deposit (Reference: Keystart, About Keystart, Dec 2 2023). 

With this information under your belt, you can firm up a savings plan (if one is needed), and narrow down your budget - allowing you to check out homes with more certainty of what's achievable. 

Why not start your window shopping now? Explore our most popular packages here.