Australian property price numbers are continuing to break records. According to new data, the average home deposit has reached a record $119,560, up $11,700 — or 11% — since last year.
The research, released in Finder’s First Home Buyer Report 2022, surveyed 1,001 first home buyers in Australia, to reach the average home deposit number of $119,560 — 30% more than Australia’s average full-time salary of $90,916.
The research found it’s now taking the average home buyer 2 to 5 years to save that pot of cash, and that more than a third (36%) of first home buyers are taking 5 years or more to save for a deposit. A further 25% need between 5 and 10 years to save, while just 6% are able to save in less than 12 months.
“The recent house price boom combined with the increased deposit requirement is making it tough for first home buyers to infiltrate the market,” said Graham Cooke, head of consumer research at Finder. “Saving up to buy your first home has become a decade-long exercise for some people. Getting on the property ladder is becoming out of reach for many with affordability deteriorating.”
Cooke urged wanna-be home buyers to supercharge their savings by looking at term deposits, which can be as high as 3.75% if you’re willing to lock up your money for 24 months. “Also remember that, depending on your state, you will want to calculate your stamp duty also. This usually has to be paid for outside of your home loan,” he says.
Cooke’s other top tips for first home buyers are below:
Things like cars, bikes, sporting goods, gaming consoles and designer clothing can fetch a decent price on second-hand markets.
Find a Guarantor
If your parents don’t want to part with cash, they could use their property as security to guarantee part of your deposit. This reduces the amount you have to save and might help you avoid lender’s mortgage insurance (LMI) costs, too.
Save Using the First Home Super Saver Scheme
This scheme helps you save more towards your deposit, as any money saved is taxed at a lower rate, and earns a return in your super fund.
Go on a Spending Diet
It’s like Dry July, but for your wallet. Commit to stop spending on takeaways, shopping, gifts or experiences for just one month and see how much you can save.