How long it really takes to save for a mortgage deposit on an Australian home

Young couples looking to buy in Sydney, Melbourne or Brisbane can now save for a mortgage more easily than a year ago.

The Reserve Bank’s sharp rate hikes have reduced the banks’ ability to lend, narrowing the choices available to the average full-time worker on a $94,000 salary.

But real estate group Domain calculated that this also reduced the time it took to save for a 20 percent mortgage for young couples buying together with two incomes.

‘In the past, mortgage holders benefited enormously from floor rates, which made borrowing and repaying a mortgage cheaper. However, it was a major driver of price growth that extended the time to make a down payment,” it said in its 2023 First Home Buyer Report.

“This outlook has flipped as the RBA embarked on one of the most aggressive rate hike cycles in history, pushing cash rates to more than a decade high.”

Sydney’s median house price of $1.2 million is still very expensive, with US think tank Demographia rating it as the world’s second most unaffordable city in the world, behind Hong Kong.

This is despite CoreLogic data showing a 14.7 percent decline over the past year as the Reserve Bank of Australia raised interest rates 10 times to an 11-year high of 3.6 percent.

This meant that young couples aged 25 to 34 had seen their time to save for a down payment in Sydney drop to six years and eight months, compared to eight years and one month in April 2022, when the RBA money rate was still at a record high. reached. low of 0.1 percent.

But if a couple were willing to buy a house in St Marys, in western Sydney, that time to save for a down payment was reduced to five years and seven months.

Young couples aged 25 to 34 saw their time to save for a down payment in Sydney cut to six years and eight months, compared to eight years and one month in April 2022, when the RBA money rate was still at a record low of 0 .1 percent (pictured are homes in Oran Park)

That was based on buying an entry-level home in a suburb where $735,110 was the midpoint.

In Melbourne, where the median house price was $897,222, the time to save for a down payment dropped from six years and six months to five years and seven months, after falling 11.2 percent in the year to February.

If they bought in Sunbury, that dropped to four years and nine months in this western suburb, where $640,640 was the median home price.

In Brisbane, where the average house price was $761,781, the time to save for a down payment has fallen to four years and five months, down from five years and two months, after falling 8.6 percent.

But in Ipswich, that drops to three years and nine months in a satellite town where the median house price was $509,321.

In Brisbane, where the average house price was $761,781, the time to save for a down payment has fallen to four years and five months, down from five years and two months, after falling 8.6 percent. But in Ipswich (Springfield, pictured) that drops to three years and nine months in a satellite town where the median house price was $509,321

In Adelaide, it would take a couple four years and nine months to save for a mortgage, virtually unchanged from the four years and 10 months in April 2022, as the city’s median home price rose 4.3 percent to $694,653 .

But if they bought in the Playford council area in the far north of Adelaide, that dropped to three years and five months, where $350,904 was the median house price in Davoren Park.

In Perth, a couple would take three years and seven months, almost the same as three years and nine months almost a year ago in a city where $587,274 was the median house price after an annual growth rate of 2.6 percent.

But in Armadale, that dropped to two years and 10 months in a suburb where $325,711 was the median price in the outer southeast part of the city.