The time it takes to save for a first home has sped up, but it's still almost half a decade of sacrifice.
Young Aussies need just shy of five years to save for a house deposit, but not if you want to buy in Sydney.
The cash rate has given and taken away for first-home buyers – savings accounts are accruing more interest, helping hit a deposit sooner, but mortgages have become more expensive, fresh Domain figures show.
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The Domain First-Home Buyer Report 2024 (released on February 22) shows the average, double-income young Aussie couple will need four years and nine months to scrounge a 20 per cent deposit for a typical entry-level priced house. That is two months shorter than a year ago.
Sydneysiders need longer – six years and eight months. The New South Wales capital has lengthiest saving time for debutant buyers.
However, Domain's chief of economics and research Dr Nicola Powell said the slightly faster time it takes to get a 20 per cent deposit – which avoids lenders' mortgage insurance – comes with caveats.
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One of those is the hard yakka it takes to service a mortgage, with rates at the highest level since November 2011.
However, the hiking cash rate has helped first-home buyers quicken the time it takes to gather a deposit by providing improved interest on savings deposits.
"Mortgage affordability has really blown out, so it takes a larger proportion of your income to make those repayments," Dr Powell says. "The other flip side is a higher cash rate means you get greater interest accrued on savings, so savings rates are better, and – the research looks at compounding interest over time – that rate has helped anyone about to squirrel away some extra cash."
Regional buyers have a fighting chance, where entry-priced units require 23.6 per cent of income and entry houses 30.8 per cent.
For buyers in metro areas, the financial pinch is tighter – for the combined capital cities, entry houses demand 46.5 per cent of income and entry units 30.7 per cent.
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Affordability and a lighter monetary load can be found in the north and west.
"For entry-priced houses, Darwin offers the lightest burden, taking 29.2 per cent of a couple's income. Perth is the next best city at 31.2 per cent, which sits just above the 30 per cent benchmark for mortgage stress," the report says.
Perth was identified by Domain as a promising market for first-home buyers.
"Perth offers a lower entry purchasing price mixed with a relatively higher average wage, creating the ideal outcome of the second shortest saving time for houses and units," the report says.
The average saving time in Perth is three years and ten months for a house and two years and five months for a unit.
The report's results are based on the average income for a couple aged 25 to 34, in each capital using Australian Bureau of Statistics income figures.
The time required to save a deposit is based on a dual income, with each person saving 20 per cent of their post-tax salary every month putting it into an online saving account.
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A key finding was that compromise and the type of property a young buyer is aiming for is important in determining how long it will take.
Dr Powell says Sydneysiders may wish to rent in their home city but buy into the market by rentvesting in more affordable cities. Rentvesting is buying a first property as an investment, while continuing to rent elsewhere.
"Property type and location are the keys to supercharging your market access," she says. "It is important to remember this is not your forever home – it is your first step on the property ladder. It becomes a decision of, 'do I save for longer, or do I make a slight compromise and get in quicker?
"It is about building equity and then enabling yourself to then make that journey into your forever home."
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