The surge in property prices has seen the hurdle to get into the property market rise with the average first-home buyer deposit hitting $119,560.
According to Finder’s First Home Buyer Report 2022, the average deposit for a first-home buyer has jumped 11 per cent, or $11,700, in the year to March 2022 putting home ownership “out of reach” for many Australians.
The research found it takes the average buyer two to five years to save for a deposit with 36 per cent of first-home buyers taking more than five years.
Nearly one in 10 first-home buyers (9 per cent) required 10 years or more to save enough money for a deposit, which is a slight decline from 11 per cent last year.
While a further 25 per cent need between five and 10 years to save, while just six per cent are able to save in less than 12 months.
Head of consumer research at Finder, Graham Cooke, said many first-time buyers still can’t afford the large deposit required to purchase a home.
“The recent house price boom combined with the increased deposit requirement is making it tough for first-home buyers to infiltrate the market,” Mr Cooke said.
“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.”
Given the sharp rise in deposit requirements, 75 per cent of first-home buyers paid, or are planning to pay, a deposit of less than 20 per cent.
Mr Cooke said new buyers need to look at ways to supercharge their savings.
“Look for ways to stretch your dollar even further,” he said.
“Ongoing savings rates have improved to as high as two per cent per annum and term deposits are as high as 3.75 per cent if you are willing to lock up your money for 24 months.
“Other non-savings products like Finder Earn allow savers to earn up to 6.01 per cent per annum on their capital paid daily with no lock-ups.
“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.”