The amount of money first-time home buyers need to save for a deposit on a house has risen dramatically in all major Australian cities.
While deposits in some cities have risen by tens of thousands of dollars, a 20 per cent deposit for a median-priced home in Sydney has risen by $125,424 over the past five years.
New data from Domain shows that buyers now need to save $332,000, up from $207,066 in June 2019.
Meanwhile, the amount needed for a median-priced home in Melbourne has increased from $165,212 to $213,761.
Compare the Market economics director David Koch warned that the growing deposit could price young Australians out of the housing market.
“With property prices rising by tens of thousands of dollars in some parts of the country, many buyers feel they are being left behind as they try to save up that 20 per cent deposit,” he said. Yahoo.
Brisbane had the second largest recommended deposit increase from $81,498 to $195,293.
Adelaide followed with $78,563 to $186,994, Perth up $64,313 to $170,000, Canberra up $58,143 to $208,286, Hobart up $41,039 to $137,211 and Darwin up $12,012 to $117,009.
The amount of money first-time home buyers need to save for a deposit on a house has skyrocketed dramatically in every major city in Australia.
The median home price in Sydney had risen to $1,662,448 compared to $1,068,805 in Melbourne and $976,464 in Brisbane.
While first-time home buyers are advised to save a 20 percent deposit, lenders may accept deposits as low as that percentage.
However, those who borrow with a low deposit must pay lenders’ mortgage insurance (LMI).
LMI is a one-time, non-refundable fee that helps protect lenders in the event someone is unable to repay their loan.
Better still, the government’s First Home Guarantee allows you to be a guarantor for the buyer, meaning the buyer can avoid LMI.
Some lenders may also waive LMI for certain high-income clients, such as doctors or lawyers, or offer a $1 LMI.
The median home price in Sydney had risen to $1,662,448 compared to $1,068,805 in Melbourne and $976,464 in Brisbane.
Koch urged buyers to consider the financial burden of an LMI, which can be tens of thousands of dollars, before signing quickly.
“But is ‘LMI’ still a dirty word? If owning a home is part of your long-term plan and you’re confident you’ll be able to make the payments, you could still reap equity benefits if the property’s value increases enough before you decide to sell it,” he said.
