Western Australians Now Spend Over 8 Years Saving for Their First Home Deposit

A new study shows that Western Australians on an average single income need to spend almost a decade saving to afford the deposit on their first home.

With a median price of $530,000 for houses and $420,000 for units, Perth and surrounding suburbs are becoming very popular for both owner occupiers and investors.

Based on calculations from comparison site mozo.com.au, a first home buyer on a single income would need to save 15% of their income for 8 years and 11 months to afford the deposit on a property worth $510,000.

“We see first home buyers in Kwinana and Rockingham struggling to save up for their deposit, even for a unit,” said Justin Smith of Smartline Mortgage Advisers, Rockingham.

“When we go through the budgets of first home buyers, we find that many could afford the repayments on an average home loan, however building up savings for the 6-figure deposit is the biggest hurdle. A decade of saving every penny is tiring and a big barrier to entry into the property market for young people.”

Fortunately, many banks and financial institutions are now offering different financial solutions for those who want to get their foot on the property ownership ladder but don’t have the savings for a big deposit.

“We can now recommend loans for clients that are a bit more flexible,” Smith said.

“Some financial institutions are offering loans with only 2% deposit and others are introducing features that enable parents of first home buyers to sign on as guarantors to the loan, meaning they are giving their children a leg up into the property market.”

While some of these loan products attract extra fees and charges, like lenders mortgage insurance, the capital growth of the property could offset these costs in the long term.

For those wishing to save the old fashioned way, now is as good a time as any to start saving. As prices in other Australian capital cities skyrocket, the next few years could be the most lucrative time to book your spot on the property ladder.

CONTACT: Justin, James or Terry at Smartline Mortgage Advisers Rockingham (08) 9527 1800