Time it takes for average Aussie to save for a home deposit blows out to eight years, study claims
The time it takes for the average Australian to save for a home loan has blown out to almost a decade, grim new data has revealed.
With the escalating price of virtually everything causing people pain at the hip pocket, the announcement comes as no surprise to experts, who say Aussies are being forced to cut costs elsewhere in order to save.
The research, conducted by financial firm Canstar, suggests that it’ll take singles a total of eight years and eight months to save to buy a home in the country, with couples on a dual income looking at about four years and two months.
In some positive news however, the data also revealed that Aussie first home buyers are saving slightly more per month in 2023 than they were last year.
The study claims that people are saving an average of $1,605 per month, up $188 in 2022.
“First home buyers being able to save more in a cost of living crisis shows how determined Aussies are to get off the renting treadmill,” Canstar’s Editor-at-Large and financial commentator Effie Zahos said.
“Property prices are continuing to rise but rents are also rising to historic highs.
“Renters are no doubt feeling the pressure to get a foot on the property ladder.”
Zahos said that nine in every 10 potential first home buyers are prepared to make comprises to buy sooner.
“Radically reducing their spending was top of the list for what they would comprise on followed by purchasing an older property and buying an apartment over a house rounded out the top three,” she said.
“While 62 per cent of potential first-time buyers are regularly saving, worryingly, one-quarter don’t know how much they are regularly saving and 13 percent aren’t in a position to save.”
The study also found that 29 per cent of potential first home buyers say they are receiving some form of contribution from their parents or family – is up from 21 per cent last year.
But Zahos warned accepting help from mum and dad could come with serious risks.
“The Bank of Mum and Dad comes with warnings,” she said.
“After 12 rate hikes those parents that jumped in and helped their children financially one or two years ago may find that they are now being called on to bail the kids out as they struggle with much higher repayments and are trapped in mortgage prison with little equity in their loan to refinance to a lower rate offer.
“Parents deciding to go guarantor on a loan to help their child buy sooner should consider limiting the amount of their guarantee, check that their child has some form of income protection insurance, work out an exit strategy to release the guarantee and get independent advice so both parties know their roles and responsibilities.”
