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How long does it take to save a deposit in Australia’s priciest suburbs

Saving for a house deposit could take on average almost 20 years in some suburbs, according to startling new research by Finder.

Analysing property prices and incomes in each of Australia’s capital cities, and in Australia’s local government areas (LGAs), Finder determined where saving for a home is the most challenging.  Melbourne Suburbia

Unsurprisingly, Sydney was the most expensive, with residents needing to spend just over 8 years on average to save for a home deposit.

Melbourne came in second place, with the average time to save a deposit-taking 7 years and 4 months, followed by Hobart (6 years and 4 months), and Adelaide (5 years and 5 months).

Darwin came in as the most affordable state, with residents needing to spend only 3 years and 6 months – less than half the time it takes Sydneysiders – to save up for a home.

Average time to save a deposit

Capital city Median house/ unit price Deposit (20%) Average household income Years taken if saving 20% of income
Sydney $907,500 $181,500 $2,117 8 years and 2 months
Melbourne $715,625 $143,125 $1,885 7 years and 4 months
Hobart $515,000 $103,000 $1,555 6 years and 4 months
Adelaide $452,500 $90,500 $1,600 5 years and 5 months
Canberra $635,750 $127,150 $2,344 5 years and 2 months
Perth $529,000 $105,800 $1,972 5 years and 1 month
Brisbane $505,000 $101,000 $1,887 5 years and 1 month
Darwin $440,000 $88,000 $2,410 3 years and 6 months
All cities $591,450 $118,290 $1,971 5 years and 10 months
Source: ABS, CoreLogic, Finder

Sarah Megginson, senior editor of money for Finder, said Australia’s property prices had grown at a faster rate than incomes over the past few decades.

“In some suburbs, this contrast is more stark than others.

It’s mind-boggling just how long it could take homebuyers to save up for a deposit in some of the country’s pricier suburbs.

But this doesn’t mean first home buyers should feel discouraged. Having a realistic budget and starting to save early on – even if it’s just $100 a month – will put you on the right track.”

Bringing together house price data and household income data, Finder’s analysis reveals Sydney is home to the most expensive LGA, with residents needing on average over 18 years to save for a deposit in Woollahra.

This is followed closely by Mosman (18 years and 1 months) and Waverley (16 years and 6 months).

In fact, the top 10 LGAs where it takes the longest to save based on the average household income are in and around Sydney.

In Victoria, the LGA of Queenscliff takes the top gong – taking on average 12 years and 5 months to save for a house deposit.

Megginson said inner city suburbs – particularly in Sydney and Melbourne – can be very pricey as the demand here is high.

“If you’re not willing to compromise on location, make sure you’re keeping realistic expectations when it comes to size, style and the number of bedrooms and bathrooms.Sydney+suburbs

On the other side of the spectrum, residents of Cobar in New South Wales need only 1 year and 8 months to save up for a deposit.

Tasmania’s West Coast (1 year and 9 months) and Broken Hill in New South Wales (1 year and 10 months) round out the top three easiest regions to save up for a deposit."

Megginson said it was important to have an open mind and to look at all the schemes, grants, and incentives that can help you buy a home.

“There are tens of thousands of dollars on offer from various government programs.

Your first home is probably not going to be your dream home - and that’s completely normal. You can always upsize to a larger home further down the track once you’ve built up some equity.

In the meantime, you could consider investing in a more affordable property so you can get your foot on the property ladder sooner than later,”

The LGAs where it takes the longest to save for a deposit

State LGA Median house / unit price Deposit (20%) Average household income Years taken if saving 20% of income
NSW Woollahra $2,950,000 $590,000 $3,104 18 years and 2 months
NSW Mosman $2,885,750 $577,150 $3,063 18 years and 1 month
NSW Waverley $2,345,000 $469,000 $2,742 16 years and 5 months
NSW Hunters Hill $2,310,000 $462,000 $2,961 15 years
NSW North Sydney $2,152,500 $430,500 $2,776 14 years and 11 month
NSW Randwick $1,779,750 $355,950 $2,299 14 years and 11 month
NSW Strathfield $1,662,500 $332,500 $2,178 14 years and 7 months
NSW Byron $1,108,750 $221,750 $1,497 14 years and 2 months
NSW Willoughby $1,940,000 $388,000 $2,719 13 years and 9 month
NSW Burwood $1,335,000 $267,000 $1,941 13 years and 2 months
Source: ABS, CoreLogic, Finder

The LGAs where it takes the least amount of time to save for a deposit

State LGA Median house/unit price Deposit (20%) Average household income Years taken if saving 20% of income
NSW Cobar $155,000 $31,000 $1,748 1 year and 8 months
TAS West Coast $112,750 $22,550 $1,258 1 year and 9 months
NSW Broken Hill $130,000 $26,000 $1,334 1 year and 10 months
QLD Isaac $226,250 $45,250 $2,292 1 year and 11 months
QLD Banana $190,000 $38,000 $1,845 1 year and 11 months
WA Port Hedland $298,250 $59,650 $2,796 2 years
QLD Central Highlands $226,375 $45,275 $1,996 2 years and 1 month
VIC Yarriambiack $135,000 $27,000 $1,186 2 years and 1 month
SA Wattle Range $156,913 $31,383 $1,357 2 years and 2 months
WA Kalgoorlie/ Boulder $265,000 $53,000 $2,249 2 years and 2 months
Source: ABS, CoreLogic, Finder

3 steps to saving for a house deposit:

  1.  Determine your deposit size.
    Get a rough idea of what you need to save – the typical house deposit is 20% of the property price, but many lenders will accept a deposit as low as 10% or even 5%.
  2.  Get serious about saving.
    Set a budget and find ways to cut back.
    Budgeting tools like the Finder app can categorise your spending so you can see where you can cut back and build up your bank balance.
  3.  Get help if you can.
    Check to see if you’re eligible for any government grants, or if you have family who is willing to help.
    Government grants are conditional, depending on things like the age or value of the property.
    If your parents own their home and are willing to guarantee part of your deposit, you can save a smaller deposit.

ALSO READ:

Top 10 Melbourne school zones for house price growth

Top 10 Sydney school zones for house price growth

About Michael is a director of Metropole Property Strategists who help their clients grow, protect and pass on their wealth through independent, unbiased property advice and advocacy. He's once again been voted Australia's leading property investment adviser and one of Australia's 50 most influential Thought Leaders. His opinions are regularly featured in the media. Visit Metropole.com.au
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