How long it takes Aussies to save house deposit

A new report has revealed the grim reality of how long it takes Australian first-time home buyers to save for a deposit.

A new report has revealed how long it is taking Australian first-time home buyers to save for a down payment as property market prices continue to drastically outpace wages.

The report from ANZ and CoreLogic – a property data company – shows that it would take first-time home buyers, living on an average weekly wage of $1,665, more than 11 years to save for a median deposit of $20 %, which is necessary to avoid paying lenders. Mortgage insurance (IMT).

The data revealed that the median deposit to buy property in Australia, including both units and houses, skyrocketed to $147,795.

The average time to save for a house differs in urban and regional areas, with capital cities reaching 11.2 years, while rural centers stand at 10.5 years.

Eliza Owen, head of Australian research at CoreLogic, said the record prices are fueling a “significant barrier” for first-time property buyers.

“The national median home value is now estimated at 8.5 times the national median annual household income level,” she said.

“This is a record high and a 6.8x increase since the onset of Covid-19 two years ago.

“Furthermore, the increase in the home value to income ratio was the largest in all of regional Australia, where house prices rose far more than incomes.”

The report found that the cost of renting across the country – including New South Wales, Victoria, Queensland and Western Australia – is almost the same as paying off a mortgage.

Some examples include Bourke in NSW, East Pilbara in WA, Grampians in Victoria and Far North Queensland.

Since the pandemic, advertised rentals have increased by 13%.

Last month, a new study by Finder – a financial comparison site – showed that nearly half of tenants surveyed were struggling to pay their rent.

Finder’s money editor, Sarah Megginson, said the growing pressure on tenants puts them in a very vulnerable position, with “little money for other necessities”.

“Once they’ve paid the rent, life is very tough,” Ms Megginson said.

“Some tenants simply cannot afford the rapid increase in their rent in such a short time and there are even stories of families forced to live in their cars or in makeshift tents on the street.”

Ms Megginson urged struggling tenants to try to negotiate an ’emergency audit’ with their property manager.

“If you can’t pay your rent and you have a lease now, contact your property manager and see if you can come to an agreement with your landlord,” she said.

“Those currently living in a house might consider upgrading to a townhouse or single unit, as rent increases for apartments have not been as significant.

“Cut all unnecessary expenses and do an emergency audit of all utilities to see where you can save money on things like energy bills and insurance.”

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