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Maddie Walton was 23 when she bought her first house. Here are the top five ways you can make this a reality too

Vaseline 1 month ago

By Pranav Harish for Daily Mail Australia

09:41 April 20, 2024, updated 10:18 April 21, 2024

A young Australian who bought her first home when she was just 23 is now advising other young first home buyers on the steps they can take to crack the property market.

Maddie Walton, 26, was able to buy her dream home on the Gold Coast in August 2021.

Ms Walton, who is now a mortgage broker at Loan Market Edge in Southport, told Daily Mail Australia she wanted to buy her own home from the age of 15.

“I was quite young and alone, so it was a big achievement,” she said.

Maddie Walton (pictured) bought her Gold Coast home when she was just 23 in August 2021

Ms Walton worked 70- to 80-hour weeks and juggled two jobs as a vaccine developer and as a technical support worker at Apple to save enough money to make her dream a reality.

The lack of housing supply combined with successive interest rate increases and the ongoing cost of living crisis mean that there is a housing shortage Home ownership has become a seemingly impossible task for many Australians.

The average house price in Sydney and Melbourne remains well above $1 million and the national vacancy rate hit a record low of 0.7 per cent in February, according to the latest figures from property website Domain.

Core Logic data shows the home value index, which measures monthly changes in the value of properties traded in Australia’s housing market, rose 0.6 percent in March, reflecting a fourteenth consecutive month of growth.

Despite the discouraging figures putting young people off buying a home, Ms Walton shared some tips they can use to navigate their own property journey.

Mrs Walton (pictured), who is now a mortgage broker, worked 70-80 hours a week, juggling two jobs to afford her new home

Do you know why

Ms Walton urged first-home buyers, especially millennials and their Gen Z counterparts, to figure out exactly why they want to own a home.

She said it’s not good enough for people to think buying a house is something they should do just because everyone else is doing it.

“If you don’t have any motivation or clarity (buying a house), you won’t be able to continue your savings journey,” Ms Walton said.

“You’re not going to stay consistent and you’re not going to see any light at the end of the tunnel.”

Ms Walton said it took her eight years to save enough money to buy her house, even after she got a second job in an attempt to accelerate her savings.

Ms Walton urged first home buyers (pictured) to find out why they want to buy and own a home

‘I knew there was a reason for it and that I had a specific, clear goal in mind and a path that I was following.

“That’s something I tell everyone: First and foremost, you have to clarify what the ‘why’ is.”

Bushy Martin, founder of Know How Property Finance, shares a similar view, telling Daily Mail Australia that first home buyers should ask themselves one important question.

“Is buying your own home best for you right now?” he said.

Increase your income instead of decreasing your expenses

Ms Walton said people can only cut spending by a certain amount in an effort to put more money into purchasing their home.

But rather than cutting back on necessities like food and healthcare, she says finding ways to increase income is a better way for first home buyers to achieve their real estate goals.

Ms Walton (pictured) encouraged homebuyers to find ways to increase their income by finding a second job and doing side hustles

“Look for ways to try to increase your income through second jobs and part-time jobs,” Ms Walton said.

Ms Walton said she has turned to various side hustles, such as participating in market research and completing surveys, to help pay for essentials such as groceries.

Figures released by the ABS last month showed almost a million Aussies were working more than one job to help pay for food, rent and their mortgage.

Mr Martin also encouraged homebuyers to manage their finances smarter, saying they can start by not being loyal to a particular bank and find a better mortgage deal.

“A lot of people chase the interest rate and not the results, where you look at what the actual cost of the loan is, rather than the interest rate,” he said.

“I really encourage people to review their home loans regularly,” he said.

Figures from the ABS showed that almost a million Aussies had more than one job (pictured a waitress serving food to customers)
Bushy Martin (pictured) encouraged people to be smarter with their money by finding more competitive mortgage interest rates

Don’t depend on first house plans

Several government schemes have been introduced in recent years to give first home buyers a head start in the property market.

Aussies can choose to make voluntary contributions to their nominated super fund, for example under the First Home Super Saver Scheme (FHSS) to build savings for their first home.

The FHSS allows Aussies to make a tax-free contribution of up to $50,000 and also allows up to $15,000 to be withdrawn each financial year, which they can use to finance their home purchase.

First home buyers (pictured) have been urged not to rely on government schemes and grants to help them finance their new home
Schemes such as the FHSS allow potential first home buyers to make tax-free super contributions that can be used to finance the purchase of their home (pictured, houses and apartments in Sydney)

The state government in NSW – where property prices are among the highest in Australia – granted stamp duty exemptions for those who bought a new or existing home worth up to $800,000 in July last year.

Homes worth up to $1 million may also qualify for concessional stamp duty.

However, Ms Walton urged first home buyers not to be overly reliant on these schemes as they cannot always reduce the stress of buying a home.

“Many people feel like they are stuck and have to use these (schemes) to their advantage,” she said.

‘In the end I didn’t use them because I bought above the price ceilings at the time and that was because I wanted a property to grow into.’

Don’t spend too much on a house

Mrs Walton said the biggest mistake she made when she bought her house was not realizing how much it would cost to maintain it.

“If I had my time again, I would take affordability more seriously,” she said.

“Be a little more realistic with your first home by not maxing out your borrowing capacity and trying to get the largest home you can.”

Ms Walton admitted she is now struggling to pay off her mortgage after the Reserve Bank increased interest rates 13 times between May 2022 and November 2023.

Homebuyers should consider the affordability of repayments on the property they are interested in (photo)

She went from making $550 a week in home loan repayments in 2021 to $1,000 a week because of the interest rate increases.

Roy Morgan research found that more than 1.5 million Australian mortgage holders were at risk of mortgage stress as of February this year.

Homeowners under mortgage stress spend more than 30 percent of their pre-tax income on paying off their mortgage.

RateCity calculates that banks typically provide a loan to someone buying a house worth 5.2 times their annual pre-tax salary.

The the average full-time annual salary rose by 4.5 per cent to $98,218 in the year to November 2023, ABS figures showed, meaning someone earning that amount would have a borrowing capacity of just under $511,000.

More than 1.5 million Australian mortgage holders have been at risk of mortgage stress since February this year, according to research by Roy Morgan (photos of Queensland homes).

But when monthly repayments account for 38 percent of their monthly income, homeowners find themselves under mortgage stress.

Consider it an investment

Ms Walton said while home ownership is no longer the ‘great Australian dream’, it can still be achieved if approached realistically.

“Your first home doesn’t have to be a home to live in, it can be an investment property,” she says.

Mr Martin agreed, saying real estate in Australia should be treated as an opportunity to create wealth.

“Whether you buy a house to live in or rent it out, you have to make it an investment,” he said.

“It’s the only asset in the country where you can use very little of your own money to secure an asset using the bank’s money.”

READ MORE: Property advisor shares the hard truth for young Aussies and reveals his advice for cracking the housing market

A Sydney mortgage broker (pictured) has shared his top money-saving tips for young Aussies dreaming of buying their first home