Australians now need to save almost double their deposit to buy their first home compared to 12 years ago, according to a recent report.
Data analyzed by Money.com.au, an Australian financial platform, suggests that the average house price in Australia has jumped 99% since 2012, from $489,000 to $973,000.
The report shows that in 2012, a first-time buyer would have needed $48,990 for a 10% deposit; now that figure has risen to $97,330. For buyers looking to avoid mortgage insurance (LMI), a 20 per cent deposit in 2012 would have been $97,980, while today it is $194,660.
During the same period, the average income of full-time workers increased by 42 percent, the report said.
“The affordability gap for first-time home buyers has widened significantly, making saving for a deposit almost impossible,” said the site’s Mansour Soltani.
“The subsequent increase in deposit requirements is forcing many first-time home buyers to either delay homeownership or find alternative financing methods, such as borrowing from mom and dad’s bank, or resorting to guarantors and government assistance.”
While today the average loan for a first-time buyer covers 65 percent of the average house price, in 2012 this loan covered 73 percent of the average house price. The report links this to “rising house prices and higher interest rates”.
“This tells us that the average Australian first home buyer either needs to put down a larger deposit or settle for a cheaper property – something that is increasingly difficult to do in 2024,” Peter said Drennan, also from the platform.
Drennan said: “With first home buyer loans growing three times faster than the overall loan market, buying the average home is now more difficult than ever.
Saturday, the that in 2023-2024, a household with a median income of $112,000 could only afford 14% of homes sold, the lowest share since records began in 1995.
The report finds that families earning $50,000 a year can only afford 3 percent of housing.
“First-time home buyers, or renters looking to buy, who often rely on large borrowings to access the housing market, face incredibly limited affordability challenges,” said Paul Ryan, PropTrack senior economist .
