First time buyers need to save for over four years for a house deposit

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The average Australian first time buyer couple needs to save for 4.2 years to raise a 20% deposit to purchase their first house, according to new data on Bankwest’s seventh First Time Buyer Deposit Report.

The data was based on a combined average salary of $113,619 for two people aged 25 to 34, who save 20% of their pre-tax income in a high interest online savings account. Data also included first time home owner grants, where applicable.

According to the report, the savings needed to purchase a median priced house reached $99,700 due to the healthy growth of national house prices; this was an increase from last year’s $93,800.

The median value for houses nationally experienced a 6.3% increase, from $469,000 to $498,500. Low interest rates were cited as the cause for the increase—with standard variable rates at their lowest level since 1968 and the current average rate of 5.45% per annum well below the average rate of 7.13% (accomplished over a period of 10 years to June 2015).

Although low interest rates will make it much easier for home owners to pay for their loans, they could make it difficult for first time home buyers to save for a proper house deposit.

The average interest rate for a couple with a high interest online savings account would be 2.31% over the past 12 months, but down from 2014’s 2.52%. This, however, is well above the average rate of 4.38% over the past decade.

First time buyer deposit trends by state
 
State Years needed
to save 20%
deposit (June
2015)
Years needed
to save 20%
deposit (June
2014)
Years needed
to save 20%
deposit (June
2010)
Change
over 1
year
Change
over 5
years
Savings needed
for 20% house
deposit (June
2015)
ACT Houses 4.1 4.0 4.1 0.1 0.0 $110,800
NSW Houses 5.3 4.8 4.2 0.5 1.1 $128,100
NT Houses 3.4 4.1 4.3 -0.7 -0.9 $80,500
QLD Houses 3.9 3.8 3.9 0.1 0.0 $89,000
SA Houses 3.3 3.3 3.6 0.0 -0.3 $70,800
TAS Houses 2.8 2.7 3.1 0.1 -0.3 $54,500
VIC Houses 4.4 4.4 4.2 0.0 0.2 $101,600
WA Houses 3.6 3.7 3.7 -0.1 -0.1 $95,400
Australian Houses 4.2 4.1 4.0 0.1 0.2 $99,700

Source: Bankwest First Time Buyer Deposit Report 2015













 

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