Buying your first home
How Indian migrants are working to make the great Australian dream come true. A report by KIRA SPUCYS-TAHAR and USHA RAMANUJAM ARVIND
The great Australian dream of owning your own home is slipping further out of reach for many. Property data group CoreLogic released new figures this week showing house prices increased by 19 percent in Sydney and 16 percent in Melbourne in the past year alone. Four of Australia’s eight capital cities are now showing an annual growth rate higher than 10 percent, and across all Australian capital cities the average price increase was nearly 13 percent, the fastest rate of growth in seven years.
There are many reasons people consider entering the real estate market and buying a property. For migrants in particular, home ownership represents pride and accomplishment, a stable and safe environment for them to raise their family as a long-term, value-for-money investment. It also gives the sense of putting down roots and getting established in a new land. But many migrants coming to Australia, predominantly settling in Sydney and Melbourne, are finding themselves priced out of a market dominated by investors.
With this in mind, Indian Link spoke with several Indian Australian first home buyers about the planning, challenges, strategies, triumphs, compromises and disappointments they have faced breaking into the Sydney property market.
Deepti Dabral and Sambit Agasti
Purchased land in a ‘greenfield’ project
Media sales professional Deepti Dabral and her credit analyst husband Sambit Agasti moved to Sydney nearly two years ago from Mumbai in search of a better work/life balance. Like any other prudent young couple, buying a property was the next logical step. Currently renting a unit in Parramatta, the young couple have recently purchased land in Schofields and will move in once their dream home is built next year.
“The idea germinated about a year ago. Both Deepti and I are reasonably well settled professionally and have saved up through hard work,” said Agasti. “We realised that we were ready to enter the property market.”
Having spent most of their lives in high-density areas of Mumbai, Agasti and Dabral were naturally keen to embrace the ultimate Australian dream – a suburban home with a backyard. Proximity to the rail network was not only a top priority but a primary driver in their final choice. While Deepti is lucky to work from home, Sambit has the daily commute to the CBD to consider. Given budgetary constraints, Schofields became a sensible choice.
“A lot of our friends were looking to buy land, so it seemed a very good idea to us too,” Dabral explained.
Dabral and Agasti have not only saved hard but also liquidated assets in Mumbai to facilitate the purchase. They were among the buyers who snapped up the first land release at the greenfield site being developed by Stockland. (A greenfield site is undeveloped land on the fringes of a city previously used for agriculture but rezoned for urban housing development.)
According to Rawson Homes General Manager Craig Moore, a home building company like Rawson Homes can help smooth the process of building a new home, with options for single and double storey homes, house and land packages, as well as knockdown rebuild options. “Rawson can build your dream home, with quality inclusions and your choice of specifications, at a real price with no hidden extras,” he said. “We aim to develop a quality new home according to the needs and wants of your family, and deliver your new dream home.”
With median prices soaring in the Kellyville and Rouse Hill region, Schofields is poised to become one of Sydney’s most sought-after areas and is perfectly positioned for buyers wanting to move into the northwest corridor. The community being developed opposite Schofields train station is set to feature a wide range of housing including free standing houses, apartments, terrace houses, retirement living and townhouses.
Besides suiting their unique aspirations, buying land in an emerging neighbourhood has allowed Agasti and Dabral time to stagger spending and plan their finances better.
“Last year we did not have enough savings,” explained Agasti. “It was logical to invest in the land first. We had the option to strategise towards a common goal.”
With land title settling shortly, Agasti and Dabral are not only shopping for architects but also mortgage options that they can tailor to suit their individual needs.
Dabral explained, “As land supply is limited, both due to soaring immigration and stringent rules governing the process, we went for this option over a unit closer to the city.”
Sakshi and Ankit Goyal
Saving for their first home with help from their parents
Ankit Goyal moved to Australia on a student visa six years ago. The telecom engineer has since found work with TPG and has been with the telecommunications company for some time. His young wife Sakshi, who relocated to Sydney after her marriage, recently completed her studies and currently works at UTS.
The young couple rent in the inner city suburb of Glebe and are exploring their options in the overheated Sydney property market.
“Renting is nothing but helping someone else pay off their mortgage, rather than your own,” Ankit acknowledged. “Naturally, I will look to add value to my own net worth by prudent property investment.”
Although they are looking to eventually buy, Ankit and Sakshi both feel they are not ready to take the plunge. “Hopefully, depending on our finances, 2018 is our target,” the Goyals told Indian Link.
While Ankit has paid off his student loan, Sakshi is still doing so. Although both have stable incomes, saving a little more is certainly a necessity. Ankit will also rely on his parents to lend a helping hand by selling off property back in India.
“Naturally, the western suburbs is where we are scanning for suitable property, given the exorbitant prices,” said Ankit.
A two-bedroom unit, reasonably close to public transport, and with good train connections, is on their wish list. Ankit and Sakshi are also considering an off-the-plan purchase to capitalise on the first home buyer’s incentive offered by the government.
While they have made cursory explorations, these have been mainly real estate advertisements online. They are currently adopting a wait and watch policy to see how the future will shape up.
As it is their first property, the Goyals are choosing not to worry about the so-called property bubble.
“Bubble or not, we have to enter the market and we can only hope for the best,” Ankit Goyal confessed. “Of course, those who bought prior to 2010, will stand to gain by the steep increase in value.”
Anusha and Pavan Bhuravarjela
Bought a ‘renovator’s delight’
Anusha and Pavan Bhuravarjela will move into their first home this Easter. After searching for several months, the Bhuravarjelas settled on a three-bedroom property in St Marys, a western suburb 45kms from the Sydney CBD. Poised for phenomenal development in keeping with the growth the western suburbs are currently experiencing, St Marys has already been on the radar of enthusiastic developers with an eye for value.
Located in the City of Penrith, the old house, in urgent need of renovation, met several of the Bhuravarjelas’ criteria, the topmost being proximity to public transport as both Anusha and Pavan depend on the rail network to get to work.
Set on a generous block of 650sqm, the three-bedroom house, built in the 1950s, is currently being renovated, with the new owners updating the bathroom, and adding a second, as well as restoring the floorboards and paintwork as part of makeover.
The Bhuravarjelas have budgeted for all of this.
“We had been exploring options for a while and were constantly getting priced out,” Pavan told Indian Link. “We started with a budget of $500,000 as we did not want to burn our limit and put undue pressure on our finances,” he admitted, candidly.
The couple, who currently rent at Pendle Hill, had been saving carefully for a deposit. However, they realised they were constantly falling short. As a result, they have opted to take mortgage insurance to make up the shortfall. Pavan believes that was a sound decision as the prices are only spiralling upwards.
“The salary growth is not proportionate to the growth of the property market, particularly in Sydney,” he lamented. “Sydney is getting priced out. There has been such a phenomenal growth in this sector because of overseas investment.” Only recently, an investor from China bought an entire building off the plan, he pointed out.
The frustrated couple even considered investing in India instead. The young couple are nevertheless ecstatic to finally own their own home.
Sukesh and Monica Thapliyal
Purchased off the plan
Education industry professional Sukesh and his wife Monica migrated to Australia in 2014 from Ahmedabad in India, along with their now 15-year-old son. They recently moved in to an apartment in Wentworthville which they purchased off the plan in December 2016.
“We looked at the plans in October and the development was already under construction,” Sukesh told Indian Link. “We settled on the apartment a few months later when construction was complete.”
The two-bedroom unit ticked all the boxes for the Thapliyals.
“Initially, we looked at buying a house and explored all our options,” Sukesh said. “But with our small family, we decided a unit better fitted our requirements.”
The Thapliyals own a house in India but are more than content with an apartment in Sydney, despite the fact it was probably more expensive, per square metre, than buying a house.
“I bought my unit in Wentworthville for almost the same amount as my brother who purchased his house in this suburb in 2014,” Sukesh explained. “We like living here. The area is good – it’s safe and convenient. There are Indian stores close by, good schools and access to transport – we have the railway station close by and we’re well connected by being close to the M4 and other freeways. It’s handy as we have many overseas visitors and it’s easy to get to the airport. ”
“The biggest advantage for first home buyers in purchasing off the plan is that you have minimal initial outlay,” explained Thomas Perram, a sales executive at Conquest. “With a five or 10 percent deposit, there’s a number of financial options. There’s an opportunity to put down some money and then save some more before you need to get a mortgage, or to borrow some money from mum and dad, continue saving, and pay them back when you take possession of the property.”
“Rather than having the benchmark and cost keep increasing, buying off the plan gives people an opportunity to jump in and grab a property before the market price changes,” he continued. “The government rebates are quite attractive and also an incentive for many.”
As first home buyers, Sukesh and Monica were fortunate to receive the first home buyers grant from the government and some rebate in stamp duty. “Though it wasn’t very much because we were close to the stamp duty threshold,” Sukesh said.
Recognising the increasing costs of owning a home in Australia, the Thapliyals hope to help their son in the future.
“Part of our reason for buying this apartment was to have a base investment so that later on we can help our son,” Sukesh said. “Five or ten years down the line, we’ll have something and hopefully be able to build up the number of properties.”
Dheeraj and Neha Bhardwaj
Originally from Delhi, India, Dheeraj Bhardwaj moved to Australia 12 years ago for his work in the IT industry. Initially living with friends in Ashfield, a few years later, he and wife Neha moved to St Leonards on Sydney’s North Shore. They moved to Artarmon last year for their six-year-old daughter’s schooling. The Bhardwajs are happily renting a two-bedroom apartment.
“I tried to buy in Sydney in 2013,” Dheeraj said. “We had the money, we looked at our finances, but the only property we could afford was in the western suburbs. We were looking at $400,000 apartments in Westmead.”
At that time, the couple didn’t think of purchasing an investment property and they didn’t want to live so far from the CBD.
“I work in the city and my wife works in Chatswood,” Dheeraj explained. “Time for us is precious and we want to spend it with our young child. I prefer having a 15-minute commute.”
After doing the sums, the high interest rates at that time meant the amount the Bhardwajs would pay in interest to the bank was equivalent to their rent.
“When the interest rates went down, we thought greater affordability would be there,” Dheeraj said. “But the prices just keep going up!”
“If I bought the same property I’m living in now, I would be paying so much more. It would be the principal cost, the fees and then the strata levies, which are quite high. The property prices have gone up, but there’s a slim chance you’ll get the same rates five years from now. The prices have to come down.”
Instead of purchasing a property in Sydney, the Bhardwajs are happy renting, as Dheeraj said, “I live where I want to live”, but the young family is considering buying an investment property in Brisbane.
“I’ve done some research, and Brisbane is a top performing market in terms of rental yield and investment,” Dheeraj said. “Australia is still growing, and Brisbane is next after Sydney and Melbourne for development and infrastructure, and there’s affordability.”
Dheeraj continued, “As far as Sydney is concerned, within the next four or five years, buying property here doesn’t make sense for us, financially.”