The five most common property mistakes people made in 2021

author-avatar By
on December 09, 2021 Fact Checked
The five most common property mistakes people made in 2021

With the end of 2021 in sight, one property expert revealed the mistakes buyers made this year so that you can avoid them in the new year.

The property boom has been a hot topic of conversation over the past year, with national house prices exploding by almost 22% over the past 12 months according to Domain. 

This is why it's 'no surprise' many Australians have had a number of 'property blunders' over the past year according to Lloyd Edge, Director of Aus Property Professionals (pictured above).

To go into the new year knowing what to avoid, Mr Edge provided the five most common mistakes property buyers made this year.

1. Capital cities over regional 

Many Aussies flocked to the regions over the course of the pandemic - either seeking a scenic change or to escape lockdowns - but there hasn't been the same level of regional activity in 2021.

Mr Edge believes many have gone back to the age-old belief that you must buy in large city centres.

"Although a 'sea change' may no longer be relevant to your personal circumstances, for example you are now physically required in the office, you can still consider these areas for an affordable investment opportunity, instead of sinking the majority of your money into a smaller place in a capital city," Mr Edge said.

"If you are looking to do this, look for national parks or undervalued beaches that are located in affordable capital areas."

2. Following the herd

"If you invest where everyone else does, you will see mediocre results," Mr Edge said.

He said that if you're hearing about an investment opportunity, it's 'probably too late'.

"Your own individual strategy and goals are so important in property investment, so make sure you don’t just follow what your friends or neighbours are doing," Mr Edge said.

"Evaluate your life and understand what you really want – is it a bigger backyard, a study, a balcony, proximity to cafes and restaurants? The pandemic has forced many people to realise what they truly want in their life and property."

He also stressed the importance of doing your due diligence, looking at the facts and statistics available to you.

"Some fantastic resources include CoreLogic, Australian Bureau of Statistics, Real Estate Investar, SQM Research," Mr Edge said.

"This allows you to take control of your own strategy, instead of relying on the ‘trend’."

3. Waiting on the market

At the start of the pandemic, many experts predicted a major housing market crash.

"Some economists predicted a mammoth 40% crash," Mr Edge said.

"As you know, this certainly didn’t happen, with the ABS stating that residential property prices rose 6.7% in the June quarter 2021, the strongest quarterly growth since they began recording in 2003."

Mr Lloyd described the Australian property market as 'resilient', saying it's important to seek individual advice as everyone's situation is different.

"I’m still finding people holding off now as it’s ‘too hot’, but long-term investors know that you can’t time the market and when you’re ready to buy, you buy," Mr Edge said.

4. Not considering non-traditional investments

Mr Edge said that while a 'buy and hold' strategy is popular, they might not produce the same equity and results as non-traditional investment strategies.

"Consider duplexing - through duplexing, I created enough equity to leave my full-time job as a music teacher," Mr Edge said.

"I believe duplexing can become the new ‘Great Australian Dream’, as it’s become so expensive for Aussies to own their quarter-acre block and big home."

He said that when buyers create smaller units or smaller blocks, they sell them to people who can afford to buy it.

5. Buying property in which you can't add value

"No matter the size of the renovation or your budget, you should always aim to achieve an ‘equity uplift’," Mr Edge said.

"A cosmetic renovation, not a major gut and overhaul, will increase the amount of rent you earn and add significant value."

He said that every dollar you spend on renovating should return three dollars in value.

"Look at painting the property, replacing floor coverings, adding new blinds and of course bathrooms and kitchens are the money makers," Mr Edge said.

"If you’re planning on living in the property for a significant period of time, there is no rush to add value, but this is a significant consideration for when you re-sell."


Advertisement

Buying a home or looking to refinance? The table below features home loans with some of the lowest interest rates on the market for owner occupiers.

Lender
Advertised rate Comparison rate* Monthly repayment Rate TypeOffsetRedrawOngoing FeeUpfront FeesLVRLump Sum RepaymentAdditional RepaymentsPre-approval

VariableMore details
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
LIMITED TIME OFFER

Smart Booster Home Loan Discounted Variable - 2yr (LVR < 80%)

  • Fast turnaround times, can meet 30-day settlement
  • For purchase and refinance, min 20% deposit
  • No ongoing or monthly fees, add offset for 0.10%
VariableMore details
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
100% FULL OFFSET ACCOUNTNO APPLICATION FEE OR ONGOING FEES

Low Rate Home Loan - Prime (Principal and Interest) (Owner Occupied) (LVR < 60%)

  • No upfront or ongoing fees
  • 100% full offset account
  • Extra repayments + redraw services
FixedMore details
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
USE A MARKET LEADING APP TO HELP YOU PAY OFF YOUR LOAN SOONER

Fixed Home Loan 1 year (Principal and Interest) (LVR < 80%)

  • Make up to $20,000 additional repayments per fixed term
  • Redraw available – lets you access any extra loan repayments you’ve made
  • Choose to rate lock for 90 days (fee applies)
VariableMore details
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
REFINANCE IN MINUTES, NOT WEEKS

Nano Home Loans Variable Owner Occupied, Principal and Interest (Refinance Only)

  • No application or ongoing fees.
  • 100% free offset sub account.
  • Fast online application, approval in minutes not weeks.
  • Mobile app, Visa debit card, Apple and Google Pay
  • Refinance loans and variable rates only.
VariableMore details
ZERO APPLICATION FEES

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees
ZERO APPLICATION FEES

Owner Occupier Accelerates - Celebrate (LVR < 60%) (Principal and Interest)

  • We lower your rate based off how much you’ve paid down your loan
  • Automatic rate match
  • No upfront or ongoing fees

Rates correct as of January 17, 2022. View disclaimer.


Image Supplied

Disclaimers

The entire market was not considered in selecting the above products. Rather, a cut-down portion of the market has been considered. Some providers' products may not be available in all states. To be considered, the product and rate must be clearly published on the product provider's web site. Savings.com.au, yourmortgage.com.au, yourinvestmentpropertymag.com.au, and Performance Drive are part of the Savings Media group. In the interests of full disclosure, the Savings Media Group are associated with the Firstmac Group. To read about how Savings Media Group manages potential conflicts of interest, along with how we get paid, please visit the web site links at the bottom of this page.

Latest Articles

author-avatar
Rachel is a Finance Journalist, and joined Savings in 2021. Coming from a background in the FinTech space, her interests include the innovation of lending technology, property, investing, and more. With a passion for educating and informing people about their finances, she hopes to increase the financial literacy of everyday Australians.

Be Savings smart.
Subscribe for free money newsletters.

By subscribing you agree to the Savings Privacy Policy