Do you know how long it takes to save for a deposit if you're an average home buyer?
According to Finder’s First Home Buyer Report 2022, which surveyed 1,001 first home buyers in Australia, it takes the average buyer 2 to 5 years to save that pot of cash.
Interestingly, the average home deposit has reached new highs, with many first home buyers struggling to come up with the cash.
Based on the report, the average deposit size has reached a whopping $119,560 – 30% more than Australia’s average full-time salary of $90,916.
Of course, the surge in property prices in 2021 led to the rise, with the average first home buyer deposit having increased by $11,700 over the year to March 2022 – equivalent to an 11% increase, according to ABS figures.
Mr Graham Cooke, Head of Consumer Research at Finder said many first-time buyers can’t afford to pay up such a substantial amount.
Further, he said:
“The recent house price boom combined with the increased deposit requirement is making it tough for first home buyers to infiltrate the market.
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.”
Based on the same data, three-quarters (75%) of first home buyers paid or are planning to pay a deposit of less than 20%.
Mr Cooke urged wanna-be home buyers to supercharge their savings.
He further explained:
"Look for ways to stretch your dollar even further.
Ongoing savings rates have improved to as high as 2.00% p.a. and term deposits are as high as 3.75% if you are 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.”