We have just started into the month of March so now is a great time to check in on your 2018 property goals!
17% of the year has already ticked by, hopefully, that means you are 17% into achieving your New Year property goals.
Are you tracking your property goals and your progress towards achieving them, or have they already become a distant memory?
If you have let those goals slide, you are not alone. The majority of people (92% in fact) are not able to complete any of their New Years goals. Actually, about 25% of people already gave up on their goal back in January.
We can use that information, not to be okay with quitting, but to get fired up about being in the top percentage of people who get where they want to go. After all, successful people are people who take action. You can still achieve your goal, and this post can show you how.
There’s still 83% left of this year to turn your performance around. The trick is to start right now and do a little bit every week to achieve success.
The best way to stay on track to your goal is to be motivated. If your 2018 property goal was to save for your first home, or maybe even buy a home, you are in luck, there is plenty to be motivated about.
Let’s start with that New Year’s vision you had of what you wanted your life to look like in January 2019. Financially fit, great health, good relationships…whatever that vision for yourself was, get back to that now. It’s so possible to live your dream life, feel good about yourself and even own your very own home, just remember how much you want it, to get your drive going.
1. Your property goals need to be SMART.
A SMART goal is:
- Specific: Your goal needs to be concrete solid. Anything vague or up in the air will not give your future action any focus. “I want to save money” is not specific. Instead, think of, “I will save for a home deposit so I can buy a home. This gives you focus and drive and keeps you motivated towards your outcome.
- Measurable: Break your goal down into bite-sized pieces to give yourself action steps and track your progress as you go. Nail down the facts and figures and use them in your goal setting. While saving money for a home deposit is specific, it is not measurable. So let’s add some figures. “I will save $100,000 towards a home deposit.”
- Achievable: Is your goal something that is possible? If you only earn $54,000 a year, then you might be looking to save too much. You want to create a goal that challenges you but is still within reach. If you go too easy, or too hard you will give up very quickly. If your original plan turns out to be unachievable, stay with it, just adjust your goal slightly to make it achievable.
- Relevant: Is this YOUR goal? If you are setting a goal because your parents want you to, you feel it’s the ‘right’ thing to do, or you want to impress or sooth your life partner, forget it. If the goal is not what YOU want and you do not desire the outcome you will never be motivated to achieve it. You will feel excited (maybe nervous) when you set a goal that is relevant to you. If you are on a goal plan that isn’t yours, think of ways you can get personally attached and desire the outcome for a different reason, one that matters to you.
- Time Sensitive: You need to provide a time boundary for your goal so that it becomes a priority. If you say you are going to ‘do it one day’ then you can always keep putting it off for tomorrow, or next week. Have a time frame so you get moving on small actions towards your goal right now. I will save $100,000 in three years towards a home deposit, so I can buy a home in 2021.”
2. Write your property goals down
Make sure you put your goals in writing. This is an important step to get them from your head (a concept) to the real world (an action).
By taking the proactive step of writing your goals down you set your goal firmly in the real world which means you are far more likely to take action. If you consistently break your goals and you want to breakthrough to success, go one step further and write them somewhere other people can see, like a blog or social media post. Social media can be your best friend in this case as you can expect your friends and family to hold you to your promise, ask you for updates and give you the accountability you need to get things moving.
3. Make a property goal plan
Know what you need to do to get there. Successful goals are all about action. What actions will you take in order to achieve your goal? If your aim was better health, there are many ways to reach that. Pick the avenues that you like and want and believe will get you the best results.
Look to past experience to know what to use and avoid. Is it going to be eating healthy food, eating less food, going to the gym, hiring a personal trainer, joining a walking group, taking up cycling or swimming? Narrow your choices down to the ones that will work for you and your lifestyle and get you where you want to go.
If your plan is to save $100,000 think of all the ways you can make more money and increase your income and also where you can save. If you make owning your own home in three years time your number one priority, it will be easy to see the places where you can spend time earning more money, or saving some by taking actions such as cutting off that subscription to pay TV.
4. Break your property goal down into small pieces
A property goal can seem big and overwhelming, it’s a life goal after all. Looking at the end result, it might seem impossible to get there. The trick is to focus on the small steps and work through step by step, week by week.
Break your goal down into bite-sized pieces and plan them month-by-month. This gives you a way to get moving and is also a great way to track and monitor your progress.
If we use even figures (not factoring in interest or other investment returns) your goal to save $100,000 in three years is approximately $33,000 per year, which would look like this:
- January: Open a high-interest bank account and put in $1300 automatically on payday (each fortnight)
- February: Put $1300 each payday into my savings account automatically.
- March: Have a total of $3,750 in my saving account at the end of this month
- April: Continue to put $1300 a payday into savings
- May: Continue to put $1300 a payday into savings
- June: have $16,500 in my high-interest savings account
- July: Continue to put $1300 a payday into my savings account
- August: Continue to put $1300 a payday into my savings account
- September: Have a minimum of $24,750 in my savings account
- October: Continue to put $1300 directly into savings
- November: Continue to put $1300 directly into savings
- December: Have minimum $33,000 in my high-interest savings account.
To get this I worked backwards, starting in December and halving the goal, then splitting it again. Remember, your milestones don’t need to be even. If you know you are getting a promotion in a few months time, you can change your savings tally to reflect that increase in your savings later on.
What this means is you have a weekly number to focus on, use as a template and monitor. You can make changes and adjustments as you go. Keep in mind that the interest will gather as you save, you might like to use the interest on bonus spending money so if you overachieve on your goal you can still treat yourself occasionally.
If you hit a snag in April, you can earn it back a little at a time or maybe sell something or do extra work to make up the difference. You know straight away if you are on track and you can make corrections monthly, weekly, or even fortnightly to steer you towards your goal.
If you still feel like your goal is overwhelming after you have created your small chunk plan, go even smaller. What can you do on a daily basis to change your habits or how can you re-think your savings so it means something valuable to you? If you love spending money and struggle with something like saving, break your future house down into rooms and ‘buy’ them one by one as you put your money away. That way you will feel you are buying an item, rather than saving and having money sitting there teasing you.
Above all else stay dedicated to the long-term goal. Short term distractions will pop up, a holiday, or a night out with friends. Remember these are short-term pleasures that will quickly be spent and gone. Remember your vision from the start of the year and power towards the life you want to achieve.
WHY 2018 is the year to get serious about buying a home
Want to get really inspired to save for that home? 2018 is the year to do it. Here’s why. If you are in a good financial position things have never looked so good for those looking to buy their first home.
2017 was a bumper year for real estate with Melbourne adding more than $352,000 to its median home price (while Sydney stacked $530,000 to its home median).
This pushed a lot of buyers out of the market, especially first home buyers.
While no one can predict exactly what the future will bring, the forecasts for the future can be pretty accurate using careful evaluation and study of previous trends. The result of careful analysis of the current market can give us an idea of what will happen in the Australian property market in 2018.
The reserve bank has not made any change to the interest rate, and are unlikely too. Just be cautious however, as there is still an expected rise in interest rates from the banks, and for very good reason.
Overall, Australians typically borrow more than they save, giving Australian banks less money to lend out. That means our banks need to borrow offshore money to give you your loan. That can get expensive to customers, who will need to absorb the offshore interest rates. So while interest rates in Australia are not going to move, you can be sure you will feel the impact of a US interest rate rise.
More Homes Available
More homes will now be available to owner/occupiers than before. While investors were picking off many of the homes on the market in the past, tighter lending policies on investment loans have been put in place. These policies affect how much investors can borrow, as well as their interest rate, opening the market up to more Australians who are keen to move in.
The hardest part will be the initial deposit, which is now quite high, to help protect against loans and ensure those buying can afford the loan. On a positive, with a bigger deposit loans can be repaid more quickly and easily than before.
The bad news for renters is that there is going to be some added pressure, especially in capital cities for rental homes and rental rates.
Luckily the ‘build to rent’ scheme will be a viable and growing alternative for many renters.
There is predicted growth for regional areas as well, especially those within commuting range of Melbourne with further growth expected in Geelong and Ballarat, especially for first home buyers who are looking for that work and lifestyle balance.
While first home buyers will be excited about the new property prices and better bidding conditions, they will most likely be bidding it out against other first home buyers. With stamp duty prices at painful levels (around $50,000 on a Melbourne median priced home), it encourages existing homeowners to hold onto their current property and not make any spontaneous moves. Renovations on existing home are a much more feasible and favoured option, especially with the interest rates in their favour to take out an extended home loan.
Overall housing prices are expected to maintain growth, just not at the rate that we have been used to over the past five years. The demand for housing is most certainly there, with room to grow in middle and outer regions of Melbourne especially in the west, outer southeast and north areas.
Parley Property Advisory