stretched out further, making the goal of an affordable, healthy and accessible home more remote. Prior to the recent home loan crackdown, an average first home buyer in Australia needed as long as 15 years to save the required 20 per cent deposit to secure a house in their preferred suburb, according to True Savings.
In a report that was published earlier this week, the mortgage brokerage firm noted that while the situation is quite disappointing for those earning below the average income, it was not so great for high-income earners either. The report pointed to a couple in Adelaide, who took more than three years to save a 10 per cent deposit and yet had to rely on the support of their parents to buy a four-bedroom house in Underdale.
Meanwhile, in Bondi Beach, in the eastern suburbs of Sydney, an average-income earner will need almost 14 years to save the 20 per cent deposit, and in Horsely Park it would take 13.6 years. The situation is a little more encouraging in Prahran and Parkville, where home buyers earning an average income would have to save for 9.9 years and 9.4 years, respectively, although in Melbourne’s Southbank, one would need to save for 10.5 years.
“New home buyers are facing huge challenges right now; 15 years is a long time to be saving for a 20 per cent deposit,” said True Savings’ founder and chief executive, Pete Steel, noted. “This is a group of individuals who have faced pandemic conditions and reduced incomes, the lowest interest rates on record and a housing market that is soaring. It is extraordinarily tough for those looking to break into the property market for the first time.”
He is of the view that the only way to save that amount of money is to “spend less, or curb your expectations”.
