Positive Changes in Home Deposit Saving Times for First-Time Buyers
The recent Domain First Home Buyer Report has delivered some welcome news for first-time home buyers, who are now able to reach their 20% deposit saving goal more quickly. According to the report, first-time home buyers between 25 and 34 are saving for their deposits faster than they were in April 2022, despite ten consecutive cash rate hikes.
The report breaks down the results by state, with Sydney experiencing the largest drop of 17 months, now taking 6 years and 8 months to save a deposit, compared to 8 years and 1 month in April 2022. Brisbane and Canberra both saw a 14-month decrease, with an average of 4 years and 6 years respectively to save a deposit.
One reason for this decrease in saving periods is due to the steady decline in national house prices throughout 2022, which was a result of increasing interest rates. Additionally, ABS data shows that wages have grown in both the public and private sectors, while the unemployment rate remains low at 3.5%. Savings accounts have also accrued more interest due to the rate hikes.
While this is good news for first-time buyers, saving a 20% deposit can still be challenging, especially with the increased cost of living. Borrowing capacity has also dropped due to the rising interest rates, making mortgage serviceability more difficult.
However, first-time buyers can still speed up the buying process by taking advantage of government incentives, such as the First Home Guarantee, which can reduce the deposit requirement to just 5%. Mortgage brokers can also help maximise savings by combining other government incentives.
It’s important to note that this information is general in nature and should not be considered tax or financial advice. It’s recommended to consult with a professional to assess your particular circumstances before taking any action.
