A new study from comparison site mozo.com.au showed that Western Australians on a single income need to save money for over eight years in order to afford the deposit on their first home.
Perth and surrounding suburbs are quickly becoming very popular among investors and owner-occupiers, with a median price of $530,000 for houses and $420,000 for units. However, according to calculations by mozo.com.au, a first home buyer on a single source of income would need to save 15 per cent of his income for eight years and 11 months to be able to afford a deposit on a property worth $510,000.
“When we go through the budgets of first home buyers, we find that many could afford the repayments on an average home loan, however building up savings for the six-figure deposit is the biggest hurdle,” said Justin Smith of Smartline Mortgage Advisers. “A decade of saving every penny is tiring and a big barrier to entry into the property market for young people.”
But many banks and financial institutions are now offering various financial solutions for those who want to get their foot on the property ownership ladder but unfortunately do not have enough savings for a deposit.
“Some financial institutions are offering loans with only two per cent deposit and others are introducing features that enable parents of first home buyers so sign as guarantors to the loan, meaning they are giving their children a leg up in the property market,” Smith said.
Though most of these products have extra fees and charges, Smith believes that the capital growth of the property could eventually offset the said costs in the long run.
Whether you are looking to buy your first home, move home, refinance, or invest in property, a mortgage broker can help. Access loans from all the major lenders, get help with paperwork – plus there is no charge for this service. Get help from a local mortgage broker