We’ve become a nation of homeowners for good reason. It’s tough at the start but once the mortgage payments are under control and equity is increasing, home ownership is a winning situation – providing a secure and comfortable environment, plus a safe investment. Home ownership promises a sense of control over your life.
A leg-up for your children
While some seasoned home owners are doing it comfortably, the same can’t be said for their kids. Some Baby Boomers may joke about “spending the kid’s inheritance” but the vast majority are concerned about the future security of their children. Given they have the means, Australian parents have traditionally provided a leg-up for their maturing family. Like contributing to the deposit for a mortgage loan, or helping them to purchase a block to build on.
Home ownership may not seem like an achievable goal these days…but it CAN be…though the ways to make it happen are changing.
So how are strategies changing?
First-home buyers are reacting in a myriad of ways to escalating property prices. Some are;
knuckling down sooner and working to get a deposit together faster
staying in the parents’ home for years longer than previous generations as a money saving measure
buying strategically, teaming up with their parents, friends or siblings
aiming at smaller spaces
renting out unused rooms
renting with others, while renting out their own modest investment property to help cover the mortgage payments
By changing traditional buying habits there’s definitely still a lot of innovative ways to get your foot onto the property ladder.
A new, double-win strategy
A new strategy that is becoming more prevalent is capitalising on an asset that’s already owned. By sub-dividing a large block, or demolishing the existing family home and building two or more dwellings parents are able to provide a home for the kids as they save for their own property, whilst having the potential to upgrade their own residence in the process.
Building more dwellings on your block can open the door to more family-based opportunities and it’s better for children to pay rent to their parents rather than a stranger. It keeps that money in the family economy.
Block size is the key
New home sites in Melbourne today are around 400 sq m. But in 1900 the average new block size in Melbourne was 1200 sq m. A lot of large blocks like this still exist in Melbourne’s East. But the great news is most homes built in Melbourne’s eastern suburbs in the building boom decades from the 1950’s to the 1990’s are on big blocks too, between 900 m2 and 600 m2, which provides today’s homeowners with the opportunity to develop.
Here are some development examples
- A family from Glen Waverley have just demolished their family home in order to put up two 26sq double storey townhouses on a 727 m2 block. Mum and dad will live in one and daughter in the other.
- An owner in Rowville is about to knock over his house to put two 18sq single storey townhouses on his 725 m2 block. He will keep both as rentals.
- A couple in Bentleigh East knocked over their existing dwelling and put two 23sq double storey townhouses on their 565 m2 block. They kept one home and sold the other. They now enjoy their brand new home, with its easier to maintain garden.
- A Hughesdale home owner was able to clear his site in order to put four 21sq double storey townhouses on his 1273 m2 block. He then sold all 4.
Where do you start?
The first step would be having SAW check your home site for its potential. This is often a pleasant surprise as you get a better idea of your block’s hidden value. If you’d like to know more contact us today.