It is no surprise to the mortgage brokers at Smartline Rockingham that it is becoming more difficult for first home buyers to save for their deposits. While interest rates have gone down, housing prices have been either rising or staying flat in most areas of the Perth metro area. Even with the last twelve months being “flat” in most suburbs, it is taking the average first home buyer couple 4.2 years to save money for a first home deposit according to the First Time Buyer Deposit Report from Bankwest.
This is a 20% deposit. The numbers were based on combined average earnings of $113,619 for a couple with both partners aged between 25 and 34, putting away 20% of their income for their deposit. First Home Owner Grant (FHOG) was also included in the data for those who received them.
Nationally, the median first home deposit was $99,700 due to markets such as Sydney and Melbourne, who are both seeing “boom” level rises in the housing market. The median first home price went up 6.3% this year, from $469,000 to $498,500. Low interest rates were cited as the main reason for the increase, meaning that the rate cuts are doing exactly what they are supposed to: stimulate the housing market.
While low interest rates are making it a lot easier for first home buyers to make their monthly home loan repayments, they are also raising prices, thus making it more difficult to save for the deposit.
What it Means to You
If you are saving to buy your first home and it seems like you are stuck in the mud, take heart: you are not alone. It is taking a lot of people longer to save for their deposits. Keep your head up, keep saving and keep looking forward to the day when you can sign on the dotted line for your first home.
To learn more, call a mortgage broker at Smartline Rockingham today: (08) 9527 1800.