Starting out

Hi Jon!

Just thought I'd add my two cents on top of Richards. Doesn't hurt getting a second opinion I guess

I just want to suggest that if you're living in a 2 bedroom unit – presumably by yourself (or with a partner), you'd only use one bedroom. Try and get a flatmate in to rent the other room to give you some more income; because, unless you have a well paying job, home loan repayments for $280-$300k would be around the $2,000/month mark; obviously not including other (living) expenses.

Obviously the more deposit you have the better. $7k on top of your 5% deposit won't really get you very far, especially paying the minimum $2,000/month mentioned in the above paragraph. You must live in the property for a minimum of 6 months (or is it 12 – it escapes me now lol) to get the FHOG.

IMHO, unless you have a well payed job, or you put the house in your parents name (and they put their house up as collateral; which, depending on the lender, would give you a better interest rate), I'd save for the next 6-12 months. OR purchase a property now, and get someone in to rent for the next 12 months, until you're ready to move in. Then you can somewhat have your cake and eat it too

I'm going to throw my 10c worth in here.

The thing that goes up in value is the land the dwelling sits on.  The building itself depreciates over time.  So personally I'd be looking to get a solid dwelling on the largest chunk of land that I could comfortably afford. 

A friend of mine recently bought her first home… she started mucking about looking at one bedroom units in unitblock complexes and I managed to convince her that financially, she'd be better off getting a 3 bedroom house and renting two of the rooms out to friends.  She'd end up with a bigger house on a bigger bit of land, and while the friends live with her, her costs are lower than they would have been if she'd been by herself in a one bedroom unit.  She's since bought herself a 3 bedroom house and has, many times, said she is sooooo glad I talked her into getting a house over a small unit.

Yep, in some cases you'd be right. However as an example, my house is in a boring suburb 30km from Melbourne and tripled in value between 2000 and 2010 while smaller dwellings closer to the city merely doubled in value.  Point being it's not just the fancy suburbs that perform.  Definitely a good idea to do your homework

There is also the other matter of this:
If you own a large block, you have options as to what to do with it later on as things get rezoned, council reduces permissable block sizes and so forth.  eg Bring in the bulldozers and redevelop, or build a second dwelling in the backyard etc.  You will struggle to do that if you're choking on the constraints of a body corporate with a bunch of other owners in the mix.

With inner city apartments there is sometimes that danger of oversupply as well.  There is just so darn many of them, and they're all the same, that there's always a bunch of them up for rent or sale at once, which is not helpful to your pricetag.