How banks delayed first-time buyer’s home dream

Caitie is a first-home buyer in Ocean Grove. Picture: Alison Wynd

The banks had the biggest say on when this struggling homebuyer was going break out of the rent cycle.

When she first started thinking about buying a home six years ago, Caitie said it was her salary holding her back, not the ability to save a deposit.

But time changed everything for the digital product designer, who recently signed contracts to buy her first home, a unit in Ocean Grove in Geelong.

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“I’ve been keeping my eye on it since Covid but through that process I realised I wasn’t really in a financial position to buy, mainly because of my salary,” Caitie said.

“The banks wouldn’t loan me enough due to my salary.”

Caitie’s property journey restarted in June as she grew tired of renting.

“I really wanted to live somewhere I can make a home without have the rug pulled from beneath you at any moment as a renter and having a say over your living space,” she said.

“Every year they put the rent up the maximum amount they can, so we’re totally at the whim of the landlord.

“I really want to make a place my home and to make things beautiful and put my own creative touch on it.”

Caitie revealed her property journey as new data reveals Geelong first-home buyers are getting their foot on the property ladder with less money than they’d need for a cheap car.

New analysis shows the 20 per cent deposit preferred by most banks is now $104,000 for the region’s typical home.

Caitie bought in Ocean Grove close to her community and near the beach where she wants to surf. Picture: Alison Wynd

But buyers willing to head to the cheapest spots around the city and use the federal government’s First Home Guarantee can secure properties with as little as $20,000 in upfront costs.

Caitie ultimately chose not to take a government first-home guarantee, wanting to buy her property on her own terms.

“I didn’t want to do that at all. I just wanted to have my own ownership as it was simple,” she said.

Caitie said she also wanted to buy sooner rather than later once the property market took off again and Ocean Grove ticked a lot of boxes.

“A bunch of friends are there and I also get to be near the beach to surf every day.”

Buying a unit will allow Caitie to avoid paying stamp duty, that’s to a state government incentive, while the Commonwealth Bank also offered a competitive loan that didn’t deduct her HECS debt, which would be paid off within five years, from her borrowing capacity.

That allowed her to borrow about $15,000 more than other banks would allow, she said.

A circa-1950s unit fit the bill in her search for a home.

“I really wanted character, something older, and something that was a quality build,” she said.

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