How to get into the property market: Aussie mortgage broker on the little luxuries you need to sacrifice if you want to buy a home


Owning a home has been the great Australian dream for many — but for most young people, it’s become a nightmare.

Sydney mortgage broker Quang Huynh explains how saving for a deposit has drifted beyond reach for the young generation due to one significant problem.

“Young people want the best of both worlds,” Huynh tells 7Life.

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“They want to buy that new luxury car or go on a once-in-a-lifetime trip to Europe or the Maldives — plus get into the property market in a fancy suburb.

“Unless you are earning top dollar, like $300,000 plus — which, if you are under 30, I’ve only ever seen one per cent of first-time home buyers achieve this — your savings will be limited.

“The $30,000 to $40,000 you splurged on the holiday or car could have been saved towards a deposit.”

Mortgage broker Quang Huynh has dished out the little luxuries you need to be willing to sacrifice for a home deposit. Credit: Quang Huynh/@thathomeloandude

If you are serious about buying a home, Huynh says you can start by looking at ways to save money on things you love — rather than cutting things out of your life “cold turkey”.

“Before my first home buyers decide to cut back on their purchases, I tell them to find alternative options that can replace the product or services they are currently spending their money on,” he says.

“Going cold turkey and cutting back on things while trying to save for a deposit is usually typical advice Boomers give to first home buyers.

“I find this very impractical and it instead gives a negative connotation to home ownership for young people.”

Self-sabotage savings goal

The mortgage broker of 15 years says when you stop spending money on discretionary things, you will end up self-sabotaging your savings goal.

“This type of cutting back will only last a maximum of one month before you end up spending twice as much money… You start to impulse buy random stuff because you are bored or depressed,” he explains.

Huynh says when you stop spending money on discretionary things, you will end up self-sabotaging your savings goal. Credit: Quang Huynh/@thathomeloandude

To help you successfully move towards your financial goals, Huynh suggests following the ‘replacement’ method, otherwise known as the “middle path”.

“I find this approach has a longer shelf life and is a more practical mindset and habit to be used towards any future desires my first home buyers want.

“It’s slow but it beats aggressively saving while living off bread and water every day.”

Sacrificing little luxuries

Huynh, who’s known on social media as “Q That Homeloan Dude”, says there are little luxuries you need to be willing to sacrifice — including eating out or buying expensive designer clothes.

“You love cappuccino and fancy avocado on toast from a cafe? Make them at home,” he says.

“Instead of buying luxury clothes at designer stores, go to op shops. There’s plenty of used designer clothes around.

“Rather than eat out three times a day, shorten it to once a day. Eventually, you will get it down to eating out once a month.

“The key is to find a replacement and not go monk mode and renounce all the nice things in life.”

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He says you need to put your major purchases on hold — including travel or a new car.

“It takes the most disciplined to really get into the property market,” he says.

Impulse buying

It’s not just the big-ticket items gouging the hip pocket.

“Young Aussies are impulse buying products in droves after seeing them on social media,” Huynh explains.

“Just $100 here and $200 there from a click of a button via Instagram or Facebook, accompanied with the ‘buy now pay later’ finance options, and soon a few thousand dollars are gone from their pay cheque in a single month.

“Companies and brands are getting better and better at subtle marketing to a younger audience, especially through social media in the form of casual entertainment.

“We live in a short attention span and low patience era where instant gratification trumps discipline and restraint for long term gain.”

Start now

With the cost-of-living crisis, high interest rates and soaring property prices locking many out of the housing market, Huynh says it won’t be easy to save but it’s possible if you start making sacrifices now.

“Maximising your borrowing power means sacrificing immediate necessity items,” he says.

Instead of forking out a $40,000 loan on a new car, buy a second-hand vehicle or catch public transport.

Huynh warns young people to avoid tapping into “buy now pay later” services on things they can’t afford.

The mortgage broker says young people need to set realistic expectations on where they want to buy. Credit: Quang Huynh/@thathomeloandude

“What you don’t realise is that this affects your borrowing power detrimentally in the bank’s point of view,” he explains.

“Every $1000 borrowed (even if you don’t use it) is a loss of $10,000 to $15,000 mortgage borrowing power.

“First-time home buyers in this situation with a personal loan or car loan find themselves in two sticky situations.

“One: You are now stuck in borrowing less money for what you want as the existing debts you accrued have severely affected your borrowing power.

“Two: To get rid of those existing debts to obtain the (level of) mortgage borrowing you want, you are forced to use your own savings to pay off those bad debts, which further depletes your savings for your new property.

“It’s a vicious cycle of always behind the eight ball in entering the property market.”

Be realistic

Not only should you be willing to sacrifice the little luxuries in your life, but young people need to be realistic about having to compromise on things such as location and the type of property.

“Rather than spend the big money on an ‘A’ grade flashy apartment with high strata, go find a ‘B’ to ‘C’ grade house with the same price tag,” Huynh says.

“If you had a choice of buying a C grade house and an A grade apartment, always go for the house. Where you can afford to live today doesn’t define who you are right now.

“Just because you can’t afford a house in (Sydney’s affluent) Eastern suburbs doesn’t make you any less of a person compared to a friend who can.

“Setting realistic expectation early in the game is very important.

“Sacrifice your first preference of where you want to live and focus on buying what you can afford right now.

“A good place to start is anywhere from a 50km radius of the CBD as it’s affordable.

“Then wait for your property to appreciate and then sell off and come back to the market with a bigger deposit.”

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