Alternative options can also help buyers reduce the waiting period
With first-home buyers currently facing incredibly stretched affordability, new data from PropTrack has revealed areas where they can save a deposit the quickest.
PropTrack’s latest Housing Affordability Index has shown that housing affordability challenges have pushed the average time it takes to save for a home deposit across Australia to 5.6 years. However, prospective homeowners in Western Australia take a significantly shorter period – an average of 3.8 years – to save a deposit. Queensland follows, with an average saving period of 5.4 years.
In contrast, New South Wales leads the country in the longest saving time, with prospective buyers needing 6.5 years to accumulate a deposit. South Australia is close behind at 6.3 years, while it takes six years on average to save in both Tasmania and Victoria.
Housing affordability has fallen to its lowest level on record, with the PropTrack report indicating that a typical household would need to save 20% of their income for more than five and a half years to accumulate a 20% deposit on a median-priced home.
“Over the past year, mortgage rates hit their highest level since 2011, which has drastically reduced borrowing capacities by up to 30% for new buyers,” said Paul Ryan (pictured above left), senior economist at PropTrack. “National home prices rose for the 20th consecutive month in August, increasing by 6.6% over the 2023/24 financial year—around a $50,000 rise in the national median price.”
For many potential buyers, saving for a deposit remains a major hurdle, especially when balancing rent and rising living costs. Industry experts, however, noted that alternative options – such as government grants or paying for lenders’ mortgage insurance (LMI) – could help buyers reduce the waiting period.
“First-home buyers can consider schemes like the First Home Owners’ Grant or the Home Guarantee Scheme, which can reduce or cover the cost of LMI,” said Sydney-based Mortgage Choice broker Ashley Bieser (pictured above right). “It’s always worth speaking with a mortgage broker to see which options are available.”
The First Home Owners’ Grant offers a one-off $10,000 payment, while the Home Guarantee Scheme covers LMI premiums for eligible buyers. There are also first-home buyer concessions and schemes for specific circumstances, such as rural purchases or new constructions, which vary by state.
Another option is the Super Saver Scheme, which allows prospective buyers to withdraw extra voluntary superannuation contributions for a home deposit. Alternatively, using a guarantor can reduce the loan-to-value ratio to 80%, bypassing the need for LMI.
Bieser also noted that certain professions, including doctors, solicitors, and chartered accountants, may qualify for LMI waivers, depending on the lender.
Finally, some buyers may consider “rentvesting” — renting in a preferred location while purchasing an investment property elsewhere, allowing them to enter the property market sooner.
“Rentvesting is a strategy that can work for those who want to live in more expensive areas but are willing to invest elsewhere,” Bieser said.
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