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How Young Aussies Manage To Buy Homes Without Financial Help

Contrary to what general millennial nihilism tells you, buying your first home isn't impossible -- it's just hard.

It's also just that plenty who have done it, had some kind of financial help along the way.

Whether it's moving back home to live rent-free with your parents, putting your trust fund to good use, or being lucky enough to be involved in a serious-but-not-too-serious car accident at just the right time to score a major payout (true story), significant financial support often goes hand-in-hand with home ownership.

Image: AAP

That's because the 'great Australian dream' of property ownership is expensive. The average property price in an Australian capital city ranges from $436,000 (Darwin) to $776,000 (Sydney). The market might be in a slump right now, but experts are expecting it to begin rising again by the end of 2019.

So how does anyone afford to buy in this market?

Every few months, another story hits the headlines about a young person buying their first home (or their third or fourth). Almost invariably, we learn the intrepid 23-year-old property mogul got to where they did via a combination of hard work in their parent's law firm and a $100,000 gifted deposit -- or similar.

So I tweeted a request, looking for anyone in Australia who managed to purchase their home, without financial support. I wanted to know how they managed it.

The rules were loosely defined: they had to be young-ish (below 35) and to have purchased their property recently (in the last five-ish years). Most importantly, they couldn't have benefited from financial support: no 'bank of mum and dad', no living at home rent free.

budget australian money
A 20 percent deposit on an average Sydney home is $166,000.

The responses were wide-ranging. As expected, several people said they went rural or bought in smaller cities -- but almost without exception, every single person was already from these areas. When I asked one person (who bought in Bacchus Marsh, outside of Melbourne, for $330,000 in 2015) if going regional was a lifestyle choice, he laughed.

"I'm from Ballarat. Melbourne is a lifestyle change for me."

Half a dozen people told me about buying their home in the mid-00s, right before prices soared. Great for them, not so helpful for the rest of us.

READ MORE: Is Now The Best Time For First Home Buyers To Pounce On Property?

Then there were some standout answers. It's not so much a case of 'if these people can do it, anyone can!' It's more about: well, here's how they did it. And you can do it too, if you want and your circumstances allow it.

For example: Jack*, 30, bought a two-bedroom apartment in the inner Melbourne suburb of Thornbury last year. He spent eight years living in the less desirable Preston (there's an entire Courtney Barnett song about how "depressing" the suburb is), sharing a dilapidated share-house with cracks in the walls so large, you could see the outside.

cracked wall
Living in a run-down place, like this, allowed Jack to save for a nicer one. Photo: Getty.

“The rent was really cheap,” he said. “Depending on how many housemates I had I paid somewhere between $100 and $165 per week rent the whole time I lived there.”

He said he's been lucky to enjoy a steady income since university, and describes himself as a naturally frugal person -- making coffee at home, not eating out often -- but says his cheap rent over eight years was the key factor.

Several people said they worked in lucrative gigs straight out of school, such as mining, public service, or a trade. This was accompanied by strict savings ("no indulging in luxuries with credit cards", working "crazy amounts of overtime"), which led to a deposit saved and a home loan granted.

first home owners
Photo: Getty.

One woman, Estelle, saved deposit by working in the sex industry. She's 28, has pre-approval for a home loan, and is currently searching for an apartment in her "ideal" suburb of Melbourne.

“I’ve been working in the sex industry since I was 18, and I’ve been adamant for a home since then,” Estelle said.

“I worked, I saved, and I was ready to buy a house when I was 24. However, it was a seller’s market then, and I decided it would be financially wiser to invest in a business overseas, and come back when the economy was in my favour as a buyer.”

Photo: Getty

A few stories stood out for different reasons, even if they did slightly bend the rules we set. One woman, Jade*, managed to save a $45,000 home deposit after an illness left her bed-ridden for months. As a freelance web developer, she was still able to work, even if she couldn't leave the house.

"The reality is that if I didn't get sick and I wasn't saying yes to all the jobs, I wouldn't have saved my deposit," she said.

Another woman, Cassie, spoke about the immense guilt she feels in being able to buy her home, having used inheritance money after her mum died from breast cancer.

“I would give anything to have my mum back and not be one of those people who own a house young without having to have laboured and toiled in the traditional sense,” she said.

“I know I should be grateful for this opportunity to ‘get ahead’, but mostly I just feel sad.”

It's not always as simple as work hard, save harder. Photo: Getty.

Ultimately, the 'trick' to buying a home is... there isn't one.

We essentially know what to do: save money, increase earnings, do this for a long time and be realistic in your expectations about what (and where) you can buy. Rod Attrill, money expert at Compare the Market, has some main advice for those hoping to get into the housing market: do your research about the market and what you can borrow, and get into a good savings habit as early as possible.

"The real challenge is that coming out of school and uni, you might be earning your first pay packet, so you want to have a little bit of fun as well," he said.

READ MORE: How To Save $16,000 A Year Without Really Noticing

But in the long term, a good saving habit will impact your home loan, with lenders looking at your income versus expenses. It will also give you a realistic idea of whether or not you can afford the mortgage repayments.

That being said, he's straight up about the task ahead.

"In Sydney, it's really difficult for a single person to even buy a unit somewhere relevant to the city. That's a really tough ask," he said.

"Even other states are pretty full on. Starting early and putting a little bit aside is a good idea."

Contact the author: abrucesmith@networkten.com.au