Top Strategies to Purchase Your First Unit in Perth

Purchasing a unit opens doors that houses might keep closed.

Units typically cost less than houses in the same suburb, which means your deposit goes further and your borrowing requirement drops. For first home buyers in Perth, this matters because it shortens the saving period and can place you in suburbs closer to work, family, or amenities that would otherwise stretch your budget too far.

Consider a buyer who has saved $45,000 and qualifies for the First Home Loan Deposit Scheme. A unit priced at $450,000 requires a 10% deposit, which they can meet without needing Lenders Mortgage Insurance through the scheme. A comparable house in the same area might sit closer to $650,000, pushing them into a higher borrowing bracket or requiring months of additional saving. The unit purchase moves them into property ownership now rather than later.

How does stamp duty work when you purchase a unit in Perth?

Western Australia offers a first home buyer stamp duty concession that reduces or eliminates stamp duty on properties valued up to a certain threshold. If you purchase a unit as your first home and intend to occupy it, you may not pay any stamp duty if the property value sits below $430,000. Between $430,000 and $530,000, you receive a partial concession.

Stamp duty savings on a $450,000 unit can exceed $15,000. That amount either stays in your pocket or adds to your deposit buffer, which lenders assess when calculating your borrowing capacity. The concession applies regardless of whether the property is a unit or a house, but because units generally sit at lower price points, more of them fall within the full concession range.

You cannot claim this concession if you have previously owned property in Australia, even if that property was not in Western Australia. Lenders do not administer the concession, but your conveyancer or settlement agent will apply it during the transfer process.

What deposit do you need to purchase a unit?

Most lenders accept a 5% or 10% deposit for unit purchases under the First Home Loan Deposit Scheme. Without the scheme, a 20% deposit avoids Lenders Mortgage Insurance. On a $400,000 unit, that difference sits between $20,000 and $80,000.

If you have saved 10% but not 20%, you can either apply through the scheme or pay LMI. LMI on a $400,000 unit with a 10% deposit typically costs between $8,000 and $12,000, depending on the lender and your financial profile. Some lenders offer LMI waivers for specific professions or through certain promotions, but these change frequently and are not guaranteed.

Gifted deposits from immediate family members are accepted by most lenders, provided the gift is accompanied by a signed declaration confirming it does not need to be repaid. If your deposit includes a gift, you still need to demonstrate genuine savings of at least 5% of the purchase price held in your account for three consecutive months.

Do all lenders treat units the same way?

No. Some lenders apply stricter lending criteria to units, particularly those in buildings with more than four storeys or in complexes with shared amenities like pools or gyms. They assess the building's strata report, which outlines the financial health of the owners corporation, any planned maintenance, and whether special levies are anticipated.

A unit in a suburb like South Perth or Victoria Park will generally attract more favourable lending terms than a unit in a smaller regional town, because lenders perceive stronger demand and resale potential in metro areas. If the strata report flags significant upcoming expenditure or low funds in the sinking fund, some lenders may reduce the amount they are willing to lend or decline the application altogether.

When you apply for pre-approval, the lender assesses your income and expenses but does not review the specific property. Once you have a signed contract, the lender orders a valuation and requests the strata report. If issues surface at that stage, your approval may be adjusted or withdrawn. Reviewing the strata report before making an offer protects you from surprises later.

Should you choose a variable or fixed interest rate?

A variable interest rate moves with the market, which means your repayments can increase or decrease. A fixed interest rate locks your repayments for a set period, typically between one and five years. Most first home buyers purchasing units choose either a fully variable loan or a split structure, where part of the loan is fixed and part remains variable.

Variable loans typically include an offset account, which reduces the interest you pay by offsetting your savings balance against your loan balance. If you expect to accumulate savings or receive irregular income, an offset account can reduce your interest costs over time without requiring extra repayments.

Fixed rates provide certainty but limit flexibility. You cannot make large additional repayments without incurring break costs, and offset accounts are rarely available on fixed loans. If you lock in a fixed rate and interest rates drop significantly, you remain locked at the higher rate unless you pay break costs to exit early.

For a unit purchase where your budget is tight, the predictability of a fixed rate can help with planning, but the lack of flexibility may cost you if your circumstances improve and you want to accelerate repayments. In our experience, buyers who plan to use an offset account benefit more from a variable structure.

What happens if the unit you purchase is off the plan?

Off-the-plan unit purchases require specific home loan applications because settlement occurs months or even years after you sign the contract. Most lenders issue conditional approval based on your current financial position, but they reassess your circumstances closer to settlement.

If your income drops, your expenses increase, or lending criteria tighten between contract signing and settlement, your approval may be withdrawn. Some lenders will not lend on off-the-plan properties in certain buildings or developments, particularly if presales have not reached a specified threshold.

You also need to account for valuation risk. If the completed unit is valued below the contract price at settlement, the lender will base their loan on the lower valuation, not the contract price. That means you would need to cover the shortfall from your own funds or risk breaching the contract.

Off-the-plan purchases can qualify for the First Home Loan Deposit Scheme, but spaces are limited and allocated quarterly. If you rely on the scheme and miss out on a spot, you may need to increase your deposit or adjust your purchase plans.

When should you speak to a broker before making an offer?

Before you make an offer. A broker can confirm your borrowing capacity, identify which lenders are most likely to approve your application, and flag any potential issues with the unit you are considering. If the unit has specific features that may concern lenders, such as a small floor area or unconventional layout, knowing that before you sign a contract avoids wasted time and emotional disappointment.

Brokers also have access to lenders who do not deal directly with the public and may offer better rates or more flexible criteria. If your income is casual, contract-based, or includes commissions, a broker can direct your application to lenders who assess those income types more favourably.

Call one of our team or book an appointment at a time that works for you. We walk through your situation, explain your options, and structure your application to give you the strongest chance of approval.

Frequently Asked Questions