Saving for a deposit could take more than 9 years

New research by RateCity.com.au found that first home buyers (FHBs) looking for a median-priced apartment in Sydney ($740,093) may need to save for nine years and six months if they put away $200 per week, or five years if they set aside $400 per week. This is assuming they are required to save $109,171 to cover the 10 per cent deposit, plus lenders mortgage insurance and stamp duty.

In Melbourne, it could take six years and three months for FHBs putting away $200 a week to afford a median-priced apartment in Melbourne ($566,148), or if they set aside $400 a week, they could have a deposit together ($69,048) in three years and three months.

Next on the list is Canberra, where FHBs saving $200 a week to purchase a median-priced apartment ($441,787) could be spending five years and seven months to accumulate a deposit of $61,818, or two years and 11 months if they doubled their weekly savings.  

Meanwhile, FHBs seeking a median-priced apartment in Adelaide ($324,477) could be waiting for four years and six months before they can afford a deposit of $49,413 by saving $200 a week, and two years and four months if they were able to put aside $400 a week.

According to RateCity.com.au’s research, it would take the same amount of time to save a deposit of $49,231 for a median-priced apartment in Hobart ($366,126).

A median-priced apartment in Brisbane ($382,601) could take FHBs four years and one month to accumulate the required deposit ($44,871) if they saved $200 a week, and two years and one month if they saved $400 a week.

Out of all the capital cities, Darwin had the best timeline, with FHBs likely to take one year and seven months to save enough to afford a $303,889 apartment, which is the median price there, if they put aside $400 a week. This blows out to three years and three months if they saved $200 a week.

Sally Tindall, RateCity’s research director, said that the research shows it’s tough to get into the property market, but not impossible, especially now that the market is in decline and investors “dip out”.

She said that FHBs could reduce the cost of their home loan by saving a 20 per cent deposit to avoid lenders mortgage insurance and by taking advantage of FHB stamp duty exemptions. 

State-based FHB grants are also worthwhile keeping an eye out for, according to Ms Tindall, as well as the federal government’s First Home Super Saver Scheme, which would allow FHBs to withdraw up to $30,000 from their superannuation account tax-free to help cover deposits.

She also recommended storing savings in a high-interest account to speed up the accumulation.

RateCity.com.au’s figures were determined using data from CoreLogic and Genworth’s lenders mortgage insurance calculator.

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