Young Canberrans struggle against rising home deposits

Font size :
Though homeowners in Canberra welcome the recent cuts to interest rates, those who are trying to save for a deposit feel trapped in the ever-rising Canberra rental market.

"The main challenge is saving for the deposit, rather than paying off the mortgage," said Domain chief economist Andrew Wilson. "Incomes aren't growing at all. Even though the ACT has among the highest income of any of the capitals, the trend is towards declining affordability."

A survey of 1000 18-34-year-old respondents showed that more than half believed that the increased cost of living priced them out of buying a home, in spite of the national capital's above average income levels.

"I think it's the same problems we have Australia-wide and that's low incomes growth. The low incomes growth just doesn't give the capacity to save faster or to catch up with that deposit gap," Wilson said.

Hence, a lot of millennials are opting to rent rather than buy.

"We're seeing young people paying well in excess of 50 per cent of their pre-tax income on rent," said Travis Gilbert, ACT Shelter executive officer. "It's the more drastic end of the scale, but some are going without meals to pay rent."

Gilbert said that the 10 per cent deposit required for a standard $420,000 two-bedroom apartment can quickly jump from $42,000 to $64,000 once stamp duty and mortgage insurance are factored in.

"The paradox is if once you have a deposit, it's often cheaper to buy than rent in Canberra," he said. "Apartments can be cheaper to buy if they can raise the deposit."

It can be confusing to know whether to get a variable rate or fixed rate mortgage, and what features are important. That's why it's important to not only check the right rates, but make sure that you're getting the right features in your home loan. Get help choosing the right home loan

Mortgage News and Articles

How to tell when a housing market is cooling How to tell when a housing market is cooling

You need to check clearance rates, listings, and the price gap, among other factors Read more

Growing demand for green apartments in Sydney Growing demand for green apartments in Sydney Both owner-occupiers and investors favour eco-friendly buildings for their energy-saving features and reduced environmental footprint ... Read more

Are property investors as rich as they appear? Are property investors as rich as they appear? A multi-property portfolio doesn’t guarantee easy millions ... Read more

Be proactive about getting a better mortgage deal Be proactive about getting a better mortgage deal Apathy could be costing you a considerable amount of money over the lifespan of your loan ... Read more

More mortgage news and articles

Sponsored Links

Wednesday, Sep 20, 2017
Top Featured Rates
Top Bank Rates

Get help choosing the right home loan

Let us help you find the right home loan for your needs.

Tell us a bit about your circumstances:
  • Purpose of mortgage
  • Household Income
    $
  • How much do you want to borrow?
    $
  • How much deposit do you have?
    $
  • How much is your house worth?
    $
  • How much do you still owe on your mortgage?
    $
  • What type of mortgage do you have?


  • How much is your new home?
    $
  • How much do you want to borrow?
    $
  • How soon do you want a mortgage?
Next
  • First name
  • Last name
  • Where do you live?
  • Phone number

Special Offers

Related Keywords