Common property myth exposed: $161,000 deposit 'hack' busted
We’ve all heard the common trope that young Australians find it hard to save for a property because of unnecessary spending on things like takeaway coffee and Netflix subscriptions.
Many commentators have felt the wrath of young Australians when they have argued a simple hack to save for a house deposit would be to cut back on small everyday expenses.
But new data has found it would take 143 years to save for a deposit in Sydney by giving up your daily cup of Joe, according to Finder.
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Home prices are expected to slow down this year, thanks to the Reserve Bank of Australia (RBA) lifting the cash rate, but for many the dream of owning property is still far out of reach.
Here is a breakdown of exactly how long you would have to go without your favourite things to save for a home deposit in each capital city.
The average cost of a takeaway coffee, bottle of wine, and restaurant meal in each city was sourced from Numbeo, the cost of a Netflix subscription was sourced from Netflix, the cost of petrol was sourced from Petrol Spy and property price statistics were sourced from CoreLogic.
The median property price in Sydney is a whopping $1,116,889. To save a 20 per cent deposit would be the equivalent of:
1,694 years of Netflix
13,961 bottles of wine
11,169 meals out
1,867 tanks of petrol
The median property price in Melbourne is $805,232. To save a 20 per cent deposit would be the equivalent of:
1,221 years of Netflix
10,390 bottles of wine
8,052 meals out
1,303 tanks of petrol
The median property price in Brisbane is $749,293. A 20 per cent deposit would be the equivalent of:
1,136 years of Netflix
8,325 bottles of wine
7,493 meals out
1,163 tanks of petrol
The median home price in Adelaide is $602,717. To save for a 20 per cent deposit you would need to give up:
914 years of Netflix
6,888 bottles of wine
6,697 meals out
1,497 tanks of petrol
The median property price in Perth is $542,338. A 20 per cent deposit would be the equivalent of:
822 years of Netflix
7,231 bottles of wine
5,423 meals out
1,014 tanks of petrol
How to save for a deposit
Despite it not being as simple as ditching the avocado on toast for breakfast, there are still ways first home buyers can make their way onto the property ladder.
Three steps to saving a house deposit:
Determine your deposit size. Get a rough idea of what you need to save – the typical house deposit is 20 per cent of the property price, but many lenders will accept a deposit as low as 10 per cent or even 5 per cent, but you will need to pay extra in the form of lenders mortgage insurance.
Get serious about saving. Set a budget and find ways to cut back.
Get help if you can. Check to see if you’re eligible for any government grants or if you have family who are willing to help. Government grants are conditional, depending on things like the age or value of the property. If your parents own their home and are willing to guarantee part of your deposit, you can save a smaller deposit.
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