The path to home ownership in Australia is dire, with the massive lump sum deposit identified as the biggest hurdle for those wanting to put a roof over their heads.
The First-Home Buyer Report from Domain released on Thursday has compared the situation nationwide, revealing the difference in time to save for a house or a unit.
The new data suggests it’s getting better in some states, but it’s not all good news.
So how long does it take for a couple, aged 25 to 34, to save for the “Australian dream”?
That means a couple on an average wage living needed to start saving in May 2019. So, around the time that Scott Morrison defeated Bill Shorten at the federal election.
Or if you’re living regionally, halfway through Melbourne or Sydney’s second COVID-19 lockdown in September 2020.
For those accessing the government’s Help To Buy scheme and securing a home loan with a 2 per cent deposit, the picture is less grim.
Saving for a house in either Melbourne or Sydney takes less than a year, with eight and ten months respectively.
However, the shared equity initiative is only available to couples earning under $120,000 and property prices are capped.
The time to save for a deposit has improved in the last five years for some Australians.
Higher interest rates accrued on savings and better wage growth has contributed to reduced time needed to save for a deposit, providing relief for some first-home buyers.
While Melburnians spend three months less to save for a house than in 2019, other major cities have seen a stark increase over that period.
It takes a year longer to save for a house deposit in both Brisbane and Hobart, and 15 more months in Adelaide.
Location matters! Most affordable areas for first-home buyers
Another way to crack the market is to choose affordable areas that take less time to save a deposit for.
Domain identified the best suburbs in each state, with Perth’s CBD crowned the easiest place in the country for the average couple to buy a home, taking just over three years.
In Sydney, it takes almost all of high school — or less than six years — to save for a house in the cheapest suburbs: Wyong, St Marys, Wollondilly and Mount Druitt.
If you start saving now, then by the Los Angeles 2028 Olympics, you’ll be able to own a home in Melbourne’s Melton-Bacchus Marsh, Sunbury or Tullamarine-Broadmeadows.
However, once you wrangle together a deposit, it doesn’t get easier.
How much are Australians spending on their mortgages?
Depending where you buy, you’re more likely to experience “mortgage stress”.
To avoid that, you must spend 30 per cent or less on your mortgage, which the data shows is only possible if you buy regionally or purchase a unit.
A Sydney couple is spending more than one salary on their mortgage, with the lightest budget burden in Darwin.
The report highlights aggressive hikes by the Reserve Bank and a property price boom due to the pandemic has seen debt soar.
Projected rate cuts for end of the year, will hopefully bring relief to first-home buyers and those hoping to enter the market.
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