The next year or two will likely be characterised by first homebuyers entering the housing market.

This will be in part thanks to Australia’s hugely strong population pyramid in the 25-35 years old age bracket, and partly due to a raft of government incentives to bring first-timers into the market.

This is potentially exciting news for first homebuyers, but with Aussies moving less frequently than they once did, it’s more important than ever that the first purchase is a smart one.

Here are the 6 tips every first homebuyer must consider

1 - Grasp the basics

Buying a home is a unique financial decision, usually involving loans (mortgages) made under unique conditions, that most of us make only on a handful of occasions in our lifetimes.

Generally speaking, property has tended to work better as a longer-term hold, because if you buy and sell too often the transactions costs (such as stamp duty) can become quite painful.

You can use our free WeLearn tools and download our free propertyinsiders’ book to equip yourself with as many tools as possible to make the right choice.

2 - Look for scarcity

At the time of writing there is something of a shift away from the Central Business Districts underway, as Aussies move outwards in search of space.

This could be of benefit for first homebuyers, who traditionally buy further afield in outer suburban estates or in regional centres as their first step onto the housing ladder.

Property prices are driven by supply and demand, so you should consider where there might be an oversupply of new dwellings being built.

You can access our oversupply risk hotspots report for free by subscribing for this article here. 

3 - Secure appropriate financing

Most first homebuyers will need a mortgage pre-approval before they are in a position to buy.

Speak to a licensed mortgage professional about how much you can and should borrow, and seek advice on whether you qualify for any first homebuyer incentives that may be appropriate for you, such as deposit schemes or stamp duty exemptions.

At the time of writing mortgage rates are at the lowest level in living memory, but this will not always remain so.

Therefore you should run some numbers with a licensed professional to ensure you aren’t borrowing more than you can comfortably afford to repay, especially if interest rates move higher in the future.

4 - Research in greater depth

Once you have a budget and price point in mind, you need to undertake more in-depth market research.

The best way to go is normally to take a top-down approach.

You can use our unique proprietary WeIntelligence tools to get the insider’s edge for free.

Use our WeIntelligence tools to access free property valuation reports, to identify higher and lower risk areas to buy in, and to access our free detailed market reports on all the sub-regions across Australia.

These are unique research tools to BuyersBuyers.com.au, and you can access them all for free here.

5 - New isn’t always better

Buying new property is attractive to first homebuyers for obvious reasons – all of us tend to like things that are new and shiny – and often incentives are put in place to encourage first-timers to buy new.

However, it is important to understand that statistically speaking more people lose money when buying new property.

Why is this so?

Partly because, like buying a new car, you tend to pay a price premium to buy new, which effectively represents the developer’s profit.

But when you come to sell, the property is no longer brand new, and therefore there may have been some depreciation in the price.

The risks tend to be higher for properties that are not built yet and are bought ‘off the plan’, since there are more unknowns, and there’s the potential for defects or other unforeseen issues.

This doesn’t mean you should always avoid new properties, but you need to understand the risks involved and perform your due diligence accordingly, including background research on the builder or developer in question. 

6 - Do your due diligence

If you’ve never bought a property before it’s critical that you understand and execute a due diligence process.

This might include, for example:

- researching all comparable market sales to ensure that you don’t overpay

- using an expert conveyancer or solicitor to confirm all relevant searches

- checking for nearby development approvals

- carrying out the relevant building and pest inspections

- understanding local market trends

- where relevant, conducting a strata search or body corporate report

Please note this list is not exhaustive and you should never sign anything until you fully understand the purchase process and terms, including settlement terms.

Buying a first home is a very exciting step for Australians, so spend some time educating yourself to make sure that your first step onto the ladder is a smart one.

If you'd like full-service assistance from one of our licensed and trusted buyer’s agents, including market research and potentially sourcing 'off-market' deals or silent sales which most buyers never see, please see our WeFind service here.

If you know where and what you want to buy, but your budget doesn’t extend to paying for a full service buyer’s agent fee, please see our more affordable WeBuy service here, which can help to negotiate thousands off your purchase price and de-risk the purchase exercise for you.