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Nearly a third of first-home buyers who purchased a property in the last two years saved for more than half a decade for their home deposit, new research has revealed.
Data from Mortgage Choice’s First Home Buyer survey found that 29.2 per cent of respondents saved for more than five years in order to afford their deposit.
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CEO of the mortgage brokerage, John Flavell said that he was “not surprised” that first-home buyers (FHBs) were having to save for years, because “the reality is house price growth continues to outpace the growth in incomes, which means first-home buyers are forced to save for longer”.
He highlighted figures from the Australian Bureau of Statistics, which show that the average income for an Australian full-time worker rose 2.22 per cent to $78,832 over the past year, but that property prices have climbed 7.1 per cent to $575,000 over the same period (according to the latest data from CoreLogic).
Mr Flavell commented: “Interestingly, while those first-home buyers who bought a home within the last two years said it took them more than half a decade to save their property deposit, those who are planning to buy their first home soon believe it will only take them ‘one to two years’ to save their deposit.”
He warned: “When it comes to buying property, first-home buyers may feel as though two years is a long time to save, but in reality, saving for a property can take quite a while.
“Even if you’re a dedicated saver who diligently puts away a portion of your income into your savings, it’s still very time-consuming to save the amount you need for a deposit.
“And, with house prices consistently rising, the deposit size needed continues to grow.”
Mortgage Choice has suggested that first-home buyers set themselves a realistic monthly savings plan, consider switching lenders, sell any unused items, pay off debts, and save 10 per cent of their income to save for a deposit in an effective manner.
[Related: FHBs crying out for government support]
