Will Testa is saving $2500 a month while living at home, but says fierce competition in Melbourne’s north is pushing his $650,000 first-home dream further out of reach. Picture: Brendan Beckett
Melbourne first-home buyer Will Testa is saving $2500 a month and living with his mum, but his $650,000 property dream is being crushed by rivals who “do not blink” at $20,000 price jumps.
On paper, industry data suggests Melbourne’s market has flattened.
But on the ground in Melbourne’s north and northwest suburbs, Pascoe Vale, Glenroy, Airport West and Tullamarine, Mr Testa says it feels anything but.
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At one recent auction in the city’s north, he bid in $1000 increments as he neared his ceiling, a rival responded in $5000 blocks.
“I’d go up $1000, they’d jump $4000,” he said.
“You only needed to beat me by $2000, but you’ve just added $10,000 to your own purchase price.”
Seeing 20 groups file through entry-level homes has become routine.
Couples with dual incomes, downsizers who have just sold and investors with equity are often circling the same listings.
Mr Testa says $1000 bids are being quickly overtaken by $5000 jumps at auctions across Pascoe Vale, Glenroy and surrounding suburbs. Picture: Brendan Beckett
“As a single-income buyer, there’s only so far I can stretch,” Mr Testa said.
“You’re competing with people who might have twice the borrowing power or who can go that extra $10,000 or $20,000 without blinking.
“That’s where it starts to feel disheartening.”
Mr Testa said the financial gap between single and dual-income households compounds quickly.
“A couple might be able to save $5000 a month between them, I might save $2500,” he said.
Mr Testa has considered the 5 per cent deposit scheme but says stretching too thin in a competitive market carries financial risks. Picture: Brendan Beckett
“Over time that gap grows, the goalposts keep shifting.”
He has considered using the federal government’s 5 per cent deposit scheme to gain an edge, but worries about stretching too thin.
“You can never have too much money when you’re buying a house,” he said.
“I do not want to scrape in and have nothing left for renovations or emergencies.
“That is a scary position to be in.”
He has also watched properties pass in above their advertised guide before returning privately at higher prices.
“If prices rise another 5 per cent, that is about $35,000 on a $700,000 home,” he said.
“As a single-income earner, that materially changes what the bank will lend and what repayments look like.
“It is not a small shift.”
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david.bonaddio@news.com.au
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