5 Real Estate Myths Keep You From Buying Your First Home
Buying your first home is a significant achievement. However, many Australians still don’t take the plunge, whether it is because they are not ready to buy or because outdated or misconstrued assumptions are holding them back. Well-meaning family or friends often perpetuate these myths, which can be found all over the internet and can create paralysis, preventing you from starting your wealth-creation journey through property.
In this article, we provide five most prevalent Australian property market myths that could be holding you back from entering the property market. Let’s separate fact from fiction so that you can then move forward decisively and confidently.
Myth 1: You Need a 20% Deposit to Buy a Home
This myth is the primary reason that many potential buyers feel excluded from the
market. While a 20% deposit is undoubtedly helpful in eliminating Lender’s Mortgage Insurance (LMI), it is neither a legal nor compulsory requirement.
Eligible buyers can access home purchase support through a variety of government-supported schemes, which means you can purchase property with only a 5% deposit. In some cases, lenders even accept deposits as low as 3%. This makes homeownership far more accessible, especially for young Australians or those entering the market solo.
In today’s climate, where property prices often grow faster than your savings, waiting to accumulate a 20% deposit means missing out entirely. This is one of the most widely believed Australian property market myths, but it simply doesn’t reflect today’s lending environment.
Myth 2: It’s Best to Wait Until the Market Crashes
One of the more dangerous Australian property market myths is the idea of “timing the market,” which keeps buyers stuck in analysis paralysis. While market dips can occur, the Australian property market has historically trended upward over the long term, even through recessions and global financial crises.
Many first-time buyers delay purchasing because they fear buying at the “wrong time.” However, here’s the truth: your time in the market is more important than trying to time the market. With experts forecasting consistent growth of 4–5% over the next few years in key regions, waiting may only result in paying more down the line.
If the home suits your needs and fits your financial capacity, the best time to buy could be now.
Myth 3: LMI Protects You as a Buyer
Let’s get something straight: Lender’s Mortgage Insurance protects the Lender, not the Borrower.
If you default on your mortgage and the Lender incurs a loss when they sell your property, LMI helps the Lender to cover those losses. There is absolutely no protection or coverage for you as the buyer. We don’t want to say it means you should avoid LMI entirely; it could still be valuable to pay LMI if it gets you into the market sooner. However, you must understand the benefits it provides.
Many first-time buyers unwittingly think LMI acts as a buyer safeguard, developing an overconfidence and dangerous assumption. Misunderstanding how LMI works is a perfect example of how Australian property market myths can create false confidence during the buying process.
Myth 4: You Must Buy Your “Forever Home” First
Many buyers fall into the trap of thinking their first home must tick every single box: perfect suburb, backyard, space for future kids, and so on. But putting that kind of pressure on yourself can make buying feel impossible.
Instead, savvy buyers start small. They focus on what they can afford now and see the property as a stepping stone. This might mean purchasing an investment property while continuing to rent where you want to live, a strategy known as “rentvesting.”
Remember: your first property doesn’t have to be your forever home. It just needs to get you started.
Myth 5: You Can Navigate It All Without Professional Help
Although it is possible to purchase property independently, the process of taking ownership of Australian property is complicated, especially in Australia’s highly competitive and highly regulated environment. Failing to fully understand everything, from hidden clauses in contracts to misleading property valuations, means many first-time buyers dismiss the threats of purchasing a home.
This is why using a trusted real estate buyers agent can add significant value to purchasers. A professionally educated buyer’s agent will safeguard your interests by procuring the ideal properties, negotiating offers, assessing the actual market value of the property, and completing all the paperwork and inspections. For buyers new to the process or unfamiliar with the area, a buyer’s agent is extremely valuable.
The small expenditure of using an expert’s assistance can save you thousands of dollars through overpaying, mistakes, missed issues, or emotional decisions.
To understand the value of hiring the right buyer’s agent, review this guide for key aspects to look for.
Final Thoughts: Bust the Myths, Buy with Confidence
For many first-time homebuyers in Australia, the prospect of buying a home can be daunting. However, it is essential to note that fear often stems from fallacies rather than facts. When you know the facts instead of relying on common Australian property market myths, you can make decisions based on what truly suits your goals.
Here is a recap of some of the facts:
1: You can buy a home without a 20% deposit.
2: Waiting for a crash could cost you money.
3: LMI protects the Lender, not you.
Your first home doesn’t have to be your forever home.
Reading a report or listening to a podcast on understanding the property market is not the same as professional assistance from a buyer’s agent. Getting professional help from a buyer’s agent is not a cost but, more often than not, a good investment.
When you engage with experienced professionals like the team at PropXperts, you will have a greater range of tools, information, and confidence to enter the property market with a solid foundation.
