The average home deposit in Australia has reached $119,560 - a whopping 30 per cent more than the average full-time salary of $90,916.
New research from Finder found that first home buyers were being hit the hardest, struggling to keep up with rising property prices.
According to Finder’s First Home Buyer Report 2022, the average first home buyer deposit increased by $11,700 over the year to March 2022 – equivalent to an 11 per cent increase.
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The Finder research found it took the average buyer two to five years to save enough to buy a home.
More than a third (36 per cent) of first home buyers took five years or more to save for a deposit.
Nearly one in 10 first home buyers (9 per cent) required 10 years or more to save enough money for a deposit, which is a slight decline from 11 per cent last year.
A further 25 per cent needed between five and 10 years to save, while just 6 per cent were able to save in less than 12 months.
Graham Cooke, head of consumer research at Finder, said many first time buyers could not afford to pay such a substantial amount.
“The recent house price boom, combined with the increased deposit requirement is making it tough for first home buyers to infiltrate the market,” Cooke said.
“Saving up to buy your first home has become a decade-long exercise for some people.
“Getting on the property ladder is becoming out of reach for many, with affordability deteriorating.”
How to save for a home
As a result of surging property prices, three quarters (75 per cent) of first home buyers reported they were planning to pay less than a 20 per cent deposit.
Cooke urged first home buyers to supercharge their savings.
“Look for ways to stretch your dollar even further,” he said.
“Ongoing savings rates have improved to as high as 2 per cent per annum and term deposits are as high as 3.75 per cent if you are willing to lock up your money for 24 months.”
Here are some other helpful tips for first home buyers to consider:
Sell assets: Things like a car, bike, sporting goods, gaming consoles and designer clothing can fetch a decent price on second-hand markets.
Find a guarantor: If your parents don't want to part with cash, they could use their property as security to guarantee part of your deposit. This reduces the amount you have to save and might help you avoid lenders mortgage insurance (LMI) costs too.
Save using the First Home Super Saver Scheme: This scheme helps you save more towards your deposit, as any money saved is taxed at a lower rate, and earns a return in your super fund.
Go on a spending diet: It's like Dry July, but for your wallet. Commit to stop spending on takeaways, shopping, gifts or experiences for just one month and see how much you can save.