Young Australians hoping to get into a home of their own spend up to two decades saving for a deposit, according to new research.
According to Finder, it now takes 12 yeast to save for a typical unit and 16 years to save for a house, putting home ownership “out of reach”, for many first home buyers.
Based on median prices, first home buyers need to save $299,868 for a house deposit, and $188,523 for a unit.
The situation is even more extreme in NSW, where it takes an average first home buyer two decades to save enough for a 20 per cent deposit.
Home loans expert at Finder, Richard Whitten said many first home buyers can’t afford to save such a significant amount.
“Wage growth over the past few decades simply hasn’t kept up with skyrocketing property prices,” Mr Whitten said.
“Saving up enough for a deposit, especially when the cost of everything from food, energy, and insurance – not to mention rent – is rising, is a big barrier to overcome.
“Buying a home is becoming increasingly out of reach for many Aussies.”
While conditions are toughest for first home buyers in NSW, the other states are only marginally better.
In Tasmania, it takes households 17 years to save the $226,098 they would need for a house.
Those in Victoria will need, on average, 16 years to save the $326,625 required for a deposit.
South Australians can get to their dream slightly faster at 15 years to save $211,456.
Queensland and the ACT are not far behind needing 14 and 12 years to save $232,960 and $312,386 respectively.
While conditions in the Northern Territory and WA are slightly better.
Households in the Northern Territory can expect to save a deposit in just eight years, while in WA homebuyers will need 10 years on average to save the $178,697 required for a deposit.
Aussies saving for a unit have it slightly easier, needing 14 years of savings in NSW ($258,914) and Tasmania ($165,720).
Prospective homeowners can expect to spend less time saving for a unit in Victoria (11 years), Queensland (10 years) and South Australia (10 years) where they will need to come up with $182,052, $144,849, and $122,114 respectively.
Units are the easiest to save for in the Northern Territory, requiring six years of savings ($93,667).
Close behind are Aussies living in Western Australia, and the ACT where they will need seven years with $105,406 and $150,232 respectively.
Mr Whitten said it was important that first home buyers not feel discouraged.
“Having a realistic budget and getting into a good savings habit early on – even if it’s just small amounts each month – will put you on the right track,” he said.
“See if you can find ways to stretch your dollar even further.
“Make sure you’re not paying for things you don’t need or aren’t using, and don’t pay too much for what you do need.”
He said the main contributor to how quickly Aussies can save for a deposit across the country is how expensive their ongoing rental costs are compared to their household income.
States where it is easier to save for a deposit have rental costs that are less than 30 per cent of median household income including in the ACT (26 per cent), NT (27 per cent), VIC (27 per cent) and WA (29 per cent), Mr Whitten said.
