Bankwest has released its 2014 First Time Buyer Deposit Report, which reveals that the dream of home ownership is slipping away from first home buyers (FHBs), with the number of years taken to save a home deposit increasing further in 2014:
…the average first time buyer (FTB) couple would need to save for 4.1 years in order to raise a 20% deposit to buy their first home. This is based on a combined average salary of $110,997 for two people aged 25-34, saving 20% of their pre-tax income in an high interest online savings account, and including any first time home owner grants, where available.
Across Australia the savings needed to purchase a median priced house has reached $93,800, up from $87,600 in 2013…
The average capital city saving time has increased to 4.4 years from 4.2 years in 2013, with savings times increasing in six of eight capitals. This has been led by a surge in saving times in Sydney, where it would now take a couple 6.7 years to save the $165,100 for a deposit in a median priced home in Sydney, up from 5.9 years in 2013. This represents by a considerable distance the longest savings time of all capital cities, and the largest year-on-year increase.
Melbourne has also seen a big increase in savings times, with an FTB couple now taking 5.5 years to save for a home, up from 5.2 years in 2013. Melbourne is followed by Darwin (4.2 years), Brisbane (4.1) and the ACT (4.0). The most affordable capital city is Hobart, where couples could afford a deposit for a median priced home after 3.3 years of saving.
The report also shows how FHBs have buckleys chance of purchasing houses in inner or middle areas of Sydney and Melbourne (see below charts).
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Chalk this report up as another salvo against Australia’s youth.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
