Powered by MOMENTUM MEDIA
subscribe to our newsletter

Market slump slices time needed to save deposit

A decline in property prices in some capital cities has reduced the time needed to save for a deposit, particularly in Sydney.

Property price drops across some of Australia’s major capital cities have slashed up to 21 months off the time needed to save for a deposit, according to new research.

Comparison website finder.com.au published analysis of changing property prices across Australia’s capital cities between the market peak in June 2017 up until June 2019.

The research found Sydney is leading the charge in property price drops, with house prices falling by $152,000 on average since 2017.

For the average Sydney couple, this decline in value has cut 21 months off the time required to save for a 20 per cent house deposit. This is assuming they each earn $1,695 per week and put 10 per cent of their weekly income towards a deposit.

Advertisement
Advertisement

Darwin came second, with property prices dropping by $50,000 on average since 2017, cutting seven months off the time required for couples to save a deposit.

Finder analyst Bessie Hassan said the slump in property prices and record low interest rates are the perfect ingredients for first home buyers – for now.

“Aussies who have saved for years might be finding they’re able to afford a larger place, or put down a bigger deposit than expected because of the dip in the market,” Ms Hassan said.

“But prices are increasing and auction clearance rates are heading back to pre-decline highs. This means buyers need to strike while the iron is hot if they want to nab a bargain.”

The Reserve Bank of Australia recently cut the official cash rate to a record-low of 0.75 per cent. This followed rate cuts in June and July.

PROMOTED CONTENT


Melbourne, which did not see a significant drop in prices, has only seen four months off the deposit saving time.

Meanwhile, Canberra, greater Hobart, and Adelaide are currently peaking, meaning there has been no change to the deposit saving time frame.

On the other hand, unit prices have dropped across almost every major capital city in Australia.

“Units are often the more affordable option, especially in larger cities,” Ms Hassan said.

“But with many abandoned building projects and delayed developments, even these prices may be artificially high in some places.

“Remember that even though property prices are reduced, it can still take up to eight years to save enough for a deposit. Prospective buyers should be prioritising their savings wherever possible.”  

[Related: Broking industry reacts to record low cash rate]

Market slump slices time needed to save deposit
mortgagebusiness

Malavika Santhebennur

Malavika Santhebennur is the features editor on the mortgages titles at Momentum Media.

Before joining the team in 2019, Malavika held roles with Money Management and Benchmark Media. She has been writing about financial services for the past six years.

Latest News

The RBA has cautioned lenders and the financial sector against “excessive risk-taking” amid rising asset prices, including looser lendin...

First home buyer loans hit its second highest level in over a decade in February, but levels are expecting to drop as house prices continue ...

A not-for-profit organisation has announced a new grant funding round for social and affordable housing projects in the Northern Territory a...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: Tackling the home deposit challenge

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.