The average deposit for an Australian home has reached beyond $100,000 for the first time ever. As property prices continue to skyrocket across the country, potential homeowners need to save for longer (or faster) if they want to get into the market. There are numerous reasons for the property boom, with the stratospheric post-COVID take-off down to low interest rates, a renewed appetite for investing, changing demographics, and low supply levels in key locations.
Register for the First Home Loan Deposit Scheme here.
According to data from the Australian Bureau of Statistics (ABS), the average amount needed to secure a mortgage in Australia is $106,743 for a 20% deposit. This represents a sharp increase over the last two and a bit years, with the average deposit today 16% higher than it was in January 2019. While low interest rates and rising prices are good news for existing home owners, potential first time buyers are being forced to wait for longer and make more compromises along the way.
As you might expect, the situation is not the same across the country. Buyers in the ACT are dealing with the biggest deposit increase, with the average first home buyer deposit now $117,790 to secure a $471,161 loan. Deposit amounts have risen by a staggering 24% since 2019 in the nation's capital, with many people now priced out of the market. NSW is not far behind with a 23% increase since 2019, followed by the NT at 20%, Victoria at 16%, WA at 14%, QLD at 13%, and SA at 8%.
In NSW, which has traditionally been the most heated market in Australia, first timers need to save $128,469 on average to borrow $513,876. In Victoria, it's $113,092 to borrow $452,369, and in Queensland it's $95,784 to borrow $383,136. Due to high prices in Sydney and select regions, NSW still holds the record for the buyers most in debt. The median Aussie home value is rising at its fastest rate in 32 years according to the ABS, and is now sitting at more than $720,000.
According to separate data from CoreLogic, the combined capital city median for a house is $681,880, with the median national unit price much lower at $551,048. The median price for a house in Sydney is currently $875,000, followed by Canberra at $816,000, Melbourne at $730,000, Hobart at $598,500, Brisbane at $550,000, Darwin at $532,000, Adelaide at 523,000, and Perth at $515,000.
According to Finder's First Home Buyers Report 2021, some first home buyers take more than a decade to save the recommended 20% deposit: "Prospective buyers are being stumped by a supercharged property market, which isn't showing any signs of slowing down just yet... Low interest rates have made it cheaper to pay down a mortgage, but this has pushed up property prices, making it even harder to save for a deposit." said Sarah Megginson from Finder.
It's not all bad news, however, with first home buyers given more opportunities to enter the market well below the standard 20% threshold. According to Ms Megginson, "As part of the First Home Loan Deposit Scheme, eligible buyers can seek out a mortgage with a five per cent deposit... This means that for a property worth $600,000, you'd only need to save $30,000 which is far more achievable than a six-figure sum, and can help younger buyers get into the market early."
You can register for the First Home Loan Deposit Scheme here.
For more information and resources to help first home buyers please read our article "How to Help Your First Home Buyer"
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