Australians now need to save nearly double the house deposit to buy their first home compared to 12 years ago, according to a recent report.
Data analysed by Money.com.au, an Australian finance platform, suggests the average property price in Australia has surged by 99 per cent since 2012, from $489,000 to $973,000.
The report shows that, in 2012, a first home buyer would have needed $48,990 for a 10 per cent deposit; now, that figure has risen to $97,330. For buyers looking to avoid lender’s mortgage insurance (LMI), a 20 per cent deposit in 2012 would have been $97,980, whereas today it’s $194,660.
During the same period, the average full-time worker’s income increased by 42 per cent, the report stated.
“The affordability gap for first home buyers has widened dramatically, making saving for a deposit a near-impossible task,” Mansour Soltani, from the site, said.
“The subsequent jump in deposit requirements is forcing many first home buyers to either delay home ownership or find alternative financing methods, like borrowing from the bank of mum and dad, or using guarantors and government support.”
While now the average first home buyer loan covers 65 per cent of the average property price, in 2012, this loan covered 73 per cent of the average house price. The report relates this to “rising property prices and higher interest rates”.
“This tells us the average Australian first home buyer either needs to come up with a larger deposit or settle for a cheaper property — both of which are increasingly difficult to do in 2024,” Peter Drennan, also from the platform, said.
Drennan said: “While first home buyer loans are growing three times faster than the overall loan market, buying an average home is now harder than ever.”
On Saturday, the that in 2023-2024, a household with a median income of $112,000 could only afford 14 per cent of the homes sold, the lowest share since records began in 1995.
The report revealed that families earning $50,000 per year are able to afford only 3 per cent of homes.
“First home buyers, or renters looking to buy, who often rely on significant borrowing to enter the housing market, are facing incredibly stretched affordability,” Paul Ryan, PropTrack’s senior economist, said.