First home buyers in Australia need more than 10 years to save to make a down payment

Australia’s housing crisis deepens as residents take more than 10 YEARS to save a 20% down payment to buy their first home

  • First-time homebuyers need more than 10 years to save a 20 percent down
  • According to a new report, it takes them nine years to save for a unit
  • As a result, the number of first home buyers is declining in Australia


Australia’s first home buyers now take more than 10 years to save a 20 percent down payment to own a home, a new report says, underlining the worsening affordability crisis across the country.

The latest ANZ CoreLogic Housing Affordability report estimates that based on households saving 15 percent of their gross annual income, it would take a record 10.8 years to save a down payment for a house and nine years for a unit.

Property prices rose 21.6 percent in the 12 months to October 2021, as buyers and investors took advantage of historically low interest rates to plunge into the market. More than half of the country’s capitals posted annual growth of more than 20 percent.

First home buyers in Australia now need more than 10 years to save a 20 percent down payment to own a home

This means that first-time homebuyers are becoming an increasingly smaller part of the demand for housing.

“The number of loans taken out by first-time homebuyers fell 27 percent between January and September 2021, as house prices rose much faster than household incomes,” said senior ANZ economist Felicity Emmett.

The national home value-to-income ratio reached a record 7.7 times in the June quarter 2021.

Between the end of March 2020 and June 2021, home values ​​in Australia increased by 12.6 percent, while median household income is estimated to have fallen by 0.2 percent.

The national home value-to-income ratio hit a record 7.7 times in the June quarter 2021

The national home value-to-income ratio hit a record 7.7 times in the June quarter 2021

Regional Australia has become less affordable during the pandemic as more flexible working arrangements increased migration to the regions, the report said.

Regional real estate values ​​rose much faster than capitals, rising 18.1 percent between March 2020 and June 2021, compared to 11.2 percent for combined capitals.

Renting in regional Australia is also the least affordable ever, reaching a record 32.7 percent in June 2021.

By comparison, downtown apartments offer some of the best opportunities for both renters and buyers, the report said.

Melbourne is the most affordable city to rent relative to family income, it found, while Darwin, Perth and Brisbane are the most affordable cities to enter the housing market.

Advertisement

.