First-home-buyers could get into home a year sooner: Here's why

First home buyers will be able to shave years off the time it takes to save for a deposit. (Source: Getty)

Saving for a home deposit is the biggest hurdle for first-home buyers looking to enter the market, but the time it would take has taken a dramatic turn.

Domain’s annual First Home Buyer report revealed the amount of time needed for Aussies to save for an average-priced home had fallen by up to 13 months.

“A time machine has been offered to first-home buyers across Australia, as falling property prices in certain cities, higher interest rates accrued on savings, and wage growth have aligned to reduce the time to save for an entry-priced property deposit,” Domain chief of research and economics Nicola Powell said.

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“Nationally, for a couple, it’s now become six months quicker for a first-home buyer to purchase an entry-priced house and two months quicker for an entry-priced unit since this time last year.”

Powell noted that, while rock-bottom interest rates benefitted mortgage holders, it also meant the time for a first-home buyer to save for a deposit was significantly higher.

“This narrative has flipped since the Reserve Bank of Australia embarked on one of the most aggressive rate-hiking cycles in history, escalating the cash rate to over a decade high. Now, in 2023, first-home buyers are facing less competition and softer prices, reshaping the affordability conversation,” Powell said.

How long would it take to save for a house?

Location	February 2023	April 2022 (pre-rate hikes)
Sydney	6y 8m	8y 1m
Melbourne	5y 7m	6y 6m
Brisbane	4y 0m	5y 2m
Adelaide	4y 9m	4y 10m
Perth	3y 7m	3y 9m
Hobart	5y 8m	6y 1m
Darwin	3y 6m	4y 5m
Canberra	6y 0m	7y 2m
Combined capitals	5y 3m	6y 2m
Combined regionals	3y 10m	3y 11m
Australia	4y 11m	5y 7m

Sydney continues to reign as the city with the longest time to save an entry-priced house deposit, at six years and eight months, followed by Canberra at six years. Despite this, these cities also saw the largest annual reduced time to save for an entry-priced deposit since last year, at 13 months shorter.

Darwin is the best city for first-home buyers looking for an entry-priced house, with the fastest savings time at three years and six months. Darwin also saw the quickest time to save five years ago, providing a more stable environment to both save a deposit and keep up with the property market at the same time.

How long would it take to save for a unit?

Location	February 2023	April 2022 (pre-rate hikes)
Sydney	4y 7m	5y 3m
Melbourne	3y 7m	4y 3m
Brisbane	3y 5m	3y 7m
Adelaide	3y 2m	3y 1m
Perth	2y 3m	2y 6m
Darwin	2y 6m	2y 9m
Canberra	3y 7m	3y 10m
Combined capitals	3y 9m	4y 1m
Combined regions	3y 1m	3y 3m
Australia	3y 7m	3y 10m

First-home buyers will find that the time to save for a deposit for an entry-priced unit is significantly shorter than for an entry-priced house.

Across the combined capitals, purchasing an entry-priced unit could result in getting onto the property ladder one year and six months earlier than saving for an entry-priced house. Location can also make a significant difference, with affordability usually improving the further the distance from the city.

“It helps if a first-home buyer is flexible on the type of property and location they want. A neighbouring suburb or a unit in your ideal area might offer much better value, Powell said.

“The decentralisation of our workforce has supercharged affordability for some, with remote working bringing increased flexibility and greater housing choice.

“In saying this, we know that not everyone is able to do this, with lower-income workers often needing to be close to their workplace as they are unable to work from home. When navigating the first-home buyer’s market, considering property type and location, or even becoming a rentvestor, can all be worthwhile.”

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