A new report from Bankwest (First Time Buyer Deposit Report 2016) states that current conditions have made it increasingly difficult for many first-home buyers to gain a foothold in the property ladder in most Aussie capital cities.

On average, Sydney first-home buyers have to save for an average of 8.4 years to have enough for a deposit on a median-priced house (six months longer than in 2015). This period was significantly longer than the 4.4-year average for first-home buyers across Australia (which itself is two months longer than in 2015).

Bankwest’s report further revealed that there are less than half as many first-home buyers in Australia in 2016 (13.4%) as a proportion of total buyers than in 2009, when they accounted for 28.8% of total buyers. With house price growth outstripping wage growth, many first-home buyers have been effectively locked out of the property market.

“Australia’s median house value grew 3.9% to $518,000 in the 12 months to June 2016, while variable-lending rates on owner occupier housing loans are notably lower than the 10-year average rate of 6.93%,” said Andrew Whitechurch, executive general manager of retail at Bankwest. “We’ve seen extremely strong growth in property values in Sydney and Melbourne, while wages have grown by just 2.2% cent nationally.” 

Sydney tops the LGAs when it comes to longest saving times

Of the top 10 local government areas (LGAs) nationwide where it takes the longest for first-home buyers to save for a deposit, eight are in Sydney. The top two LGAs are Strathfield (17.9 years; $410,800) and Mosman (17.4 years; $613,000). 

Other key findings from Bankwest’s report include:
  • The number of first-home buyers has declined to 90,939 in the year to June 2016, down from 94,517 in the previous 12 months.
  • Three of the top 10 LGAs with the shortest saving times for first-home buyers are located in Queensland and New South Wales; two are in South Australia, one is in Western Australia, and one is in Tasmania.
  • The market for units is more accessible for first-home buyers than the housing market. On average, it takes 3.5 years for first-home buyers to save a 20% deposit on a median priced unit in Australian capital cities, and 1.4 years less than it takes to save for a house in the capital cities.