When it comes to buying their first home, young buyers in Victoria are having the toughest time in the country, as they struggle to save for a deposit and continue making repayments.
Analysis shows that despite the historically low official interest rate of 1.75 per cent, it is harder for first-time buyers in Victoria to buy a property now than for those in the 1990s. Melbourne's median house price is at a record high of $726,962 amid weak wage rises.
"The problem for first home buyers is not the repayment of the loan—because of our historically low interest rates, it's very similar to what they would pay in rent. The problem is savings," said Domain Group chief economist Andrew Wilson.
Even though the affordability of deposits has improved over the March quarter, it is still harder than ever for Victorians to collect a deposit.
"Even though prices didn't fall in the March quarter in Melbourne, they were certainly flat," Wilson said. "Once house price growth starts to moderate, we see more activity from first home buyers, (but the volume) is still well below average."
But in spite of this, there are more first home buyers in Victoria than in NSW. According to Daniel Cohen, co-founder of First Home Buyers Australia, there is more new housing stock in Victoria. There is also a greater variety and quantity of employment opportunities for younger Australians in Melbourne. Victorian first home buyers are also eligible for a 50 per cent reduction in stamp duty if the property costs no more than $600,000.
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