Understanding the basics of property search for first home buyers

Your property search should start after you understand what you can borrow, not before.

Most first home buyers attend open homes before they've spoken to a broker. You're looking at properties you might not qualify for, or worse, ruling out suburbs where you could actually afford something worthwhile. The order matters.

What does pre-approval tell you before you start searching?

Pre-approval gives you a borrowing limit and a deposit requirement. These two numbers define your property search perimeter. Without them, you're guessing.

Consider a buyer who earns $95,000 and has saved $65,000. At current variable rates, borrowing capacity might sit around $550,000 to $580,000, depending on other commitments. Combined with the deposit, that gives a purchase range of roughly $610,000 to $640,000. Pre-approval locks this in and confirms which lenders will support the purchase. Once you have that range, your property search becomes focused rather than aspirational.

How stamp duty concessions affect where you can afford to buy

In Victoria, first home buyer stamp duty concessions apply in full up to $600,000 and taper off to $750,000. If your borrowing capacity puts you at $640,000, you'll pay no stamp duty at all. That's around $32,000 saved, which changes what you can afford or what you keep in reserve for furniture and settlement costs.

If you stretch to $700,000, you'll pay partial duty. If you go beyond $750,000, you'll pay the standard rate. Knowing this before you search helps you set boundaries that reflect the real cost, not just the purchase price.

Should you search in Hawthorn or widen the net to Camberwell and Kew?

Hawthorn's median unit price sits above $700,000, which puts many apartments outside the full concession threshold and potentially beyond what a single first home buyer can borrow without a guarantor. If your borrowing capacity is $580,000 and your deposit is $60,000, you're looking at a purchase price around $640,000.

In that scenario, searching in Camberwell or Glen Iris could open up more options within your range. Both suburbs sit close to Hawthorn, share similar amenities and transport links, and often have one and two-bedroom units priced between $600,000 and $680,000. Widening your search by two kilometres could double the number of properties you're eligible to buy.

How the Australian Government 5% Deposit Scheme changes your search radius

The Australian Government 5% Deposit Scheme lets eligible first home buyers purchase with a 5% deposit and no lenders mortgage insurance. In Melbourne, the property price cap is $950,000.

If you've saved $50,000, a 5% deposit structure allows you to buy up to $950,000 if your income supports the borrowing. That's a much wider search area than a standard 10% deposit scenario, where the same $50,000 limits you to $500,000. The scheme doesn't increase what you can borrow, but it does allow you to deploy your deposit further. For buyers targeting Hawthorn, this could mean access to two-bedroom units closer to Glenferrie Road rather than being limited to studios on the edge of the suburb.

What does a realistic property shortlist look like?

A shortlist should contain no more than five properties at any given time. These are properties you've inspected, researched, and could make an offer on within a week if the opportunity presents.

Your shortlist isn't a wishlist. Every property on it should fall within your pre-approved borrowing range, meet your deposit structure, and align with what you'll actually live in for at least a year. If a property doesn't meet all three criteria, it belongs on a watch list, not a shortlist. The distinction keeps your search disciplined and your decision-making faster when the right property appears.

How do you assess a property without overpaying?

Sales history, days on market, and comparable sales in the same building or street give you pricing context. Most buyers look at the advertised range and assume that's what the property is worth. Sometimes it is. Often it isn't.

In our experience, first home buyers in Hawthorn and surrounds benefit from instructing a broker to arrange a pre-purchase valuation on any property they're serious about. The valuation costs between $300 and $600, but it confirms what a lender will use as security. If you're borrowing 95% and the property doesn't value at your offer price, your loan won't settle. Knowing that before you make an offer avoids wasted time and conveyancing fees.

When should you make an offer versus keep searching?

You should make an offer when a property fits your borrowing range, meets your livability requirements, and has been on the market long enough that you understand its pricing position.

If a property has been listed for three weeks and hasn't sold, the vendor is either overpricing or waiting for the right buyer. If you're pre-approved and the property sits within your budget, that's the moment to move. Waiting another week to see if something different appears often means losing the property you've already assessed. First home buyers who succeed in tight suburbs like Hawthorn tend to act on the second inspection, not the fifth.

Call one of our team or book an appointment at a time that works for you.

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