Key takeaways
Young Aussies need at least 16 years on average to save for a house deposit
NSW households need 20 years of savings, amounting to $470,660 (Other states available)
Top tips for first home buyers
Younger Aussies looking to own a home could be waiting a while, according to new research by Finder.
Finder analysis shows young Australians need at least 12 years to save for a deposit for the average unit and 16 years for the average house if they start saving today.
This would mean saving $299,868 for a house deposit, and $188,523 for a unit.
Richard Whitten, home loans expert at Finder, 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.
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.”
Finder’s analysis shows the situation is the worst in NSW where households need on average two decades of savings for a house deposit, amounting to $470,660.
Tasmania comes in close second, with households needing 17 years' worth of savings for a house. That would mean having $226,098 saved up.
Those in Victoria will need on average 16 years to save the $326,625 required for a house deposit.
South Australians can achieve their dream 1 year quicker needing 15 years on average to save $211,456.
Aussies in Queensland and the ACT are not far behind needing 14 and 12 years to save $232,960 and $312,386 respectively.
The NT and Western Australia come in as the best places to save for homeownership.
Households in the NT can expect to find 8 years of savings equivalent to $151,584 enough for a house.
In WA, Aussies 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 New South Wales ($258,914) and Tasmania ($165,720).
Whitten urged first-home buyers not to 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.
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.
Money management apps, like the free Finder app, are a great way to keep track of your income and expenses, and from there you can find ways to save even more."
Whitten reminded Aussies that loyalty rarely pays when it comes to financial products.
“From energy to insurance to your mobile provider, it’s always a good idea to compare your options to ensure you’re getting the best bang for your buck.”
Prospective homeowners can expect to spend slightly fewer years saving for units in Victoria (11 years), Queensland (10 years), and South Australia (10 years) where they will need $182,052, $144,849, and $122,114 respectively.
Units are the easiest to save for in the Northern Territory, requiring 6 years of savings ($93,667).
Close behind are Aussies living in Western Australia, and the ACT where they will need 7 years with $105,406 and $150,232 respectively.
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.
For instance, states where it is quickest to save for a deposit have rental costs that are less than 30% of median household income: ACT (26%), NT (27%), VIC (27%), WA (29%).
| State | Years to save (house) | Years to save (unit) |
|---|---|---|
| NSW | 20 | 14 |
| VIC | 16 | 11 |
| QLD | 14 | 10 |
| ACT | 12 | 7 |
| SA | 15 | 10 |
| WA | 10 | 7 |
| TAS | 17 | 14 |
| NT | 8 | 6 |
| Australia | 16 | 12 |
4 tips for first-home buyers
1. Sell assets
Things like a car, bike, sporting goods, gaming consoles, and designer clothing can fetch a decent price on second-hand markets.
2. 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 lenders' mortgage insurance (LMI) costs too.
3. 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.
4. 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.[/tips]
