Revealed: The years it will take NT teens to buy their first home

New data has revealed how long it will take the Territorian school leavers of today to save a deposit for their first house. See how NT stacked up against the other states.

Homes like this one at 79 Mueller Rd, Malak, on the market with a price guide of $490,000, are well priced for first homebuyers. Picture: realestate.com.au

It will take the Territorian school leavers of today a decade to save a deposit for their first house, new data has revealed, but they will have the most affordable mortgages in the country.

Comparison site Finder analysed median home prices and wages throughout Australia to calculated how long it will take an average 18-year-old to afford a home deposit, and how much of their income will go towards servicing a home loan.

Territorians came out on top with Finder estimating it will take current NT school leavers 10 years on average to save a 20 per cent deposit for a median-priced NT house, based on a single income, and six years for a unit.

These teens will spend about 35 per cent of their pay cheque on a house mortgage and 22 per cent on a unit mortgage.

In comparison, the average Australian school leaver will spent 25 years saving for a house deposit on a single income and lose 74 per cent of their wage to their home loan.

In New South Wales, Year 12s will take a staggering 44 years to save a house deposit, and will need a whopping 120 per cent of an average single income to pay the loan on a median-priced house in NSW.

Finder estimated Victorian leavers will be in a position to pay a house deposit in 25 years on average, while Queenslanders will be putting off homeownership 20 years.

Daniel Harris, Real Estate Central director, said the NT, and Darwin in particular, offered good value for young buyers.

“There’s no question, Darwin represent the best chance for a first homebuyer to get into a capital city market in Australia,” he said.

“We have the advantage of being the most affordable capital city in the country.”

According to PropTrack, Darwin’s median house price was $564,000 in April and the median unit price was $386,000.

Real Estate Central director, Daniel Harris. Picture: Supplied

Graham Cooke, head of consumer research at Finder, said the school leaver data showed buying a home was becoming a pipedream for many young Aussies, if they didn’t have family support.

“The days of one income earner and a stay at home parent being able to raise a family in their own home are long gone,” he said.

Mr Cooke said units offered a far easier entry point than houses, even in the eastern capitals.

“For most people, wage growth simply isn’t keeping pace with skyrocketing property prices,” he said.

The Finder analysis found the average 18-year-old school leaver wanting to save a 20 per cent deposit on the median Aussie house price by the time they turned 20 will need to earn an eye-watering $400,504 a year straight out of school.

To afford a unit deposit by 20, they will need to earn $252,677.

Saving up a deposit for a median-priced house by 25 will mean earning six figures straight out of school ($109,873).

Finder’s head of consumer research Graham Cooke. Picture: Supplied

Mr Cooke said while the bank of Mum and Dad made it easier for some to enter the property market, not all had that privilege.

“Parental support can significantly lower the initial hurdle of saving up for a house deposit, allowing quicker entry into the market, smaller loans and a better chance of loan approval,” he said.

“For those wanting to buy, it requires an incredible amount of planning, research and sacrifice.

“It means borrowing more, working more and putting aside more money towards loan repayments and stamp duty.

“Make sure you’re across the schemes, grants and incentives that can help you buy a home.” Mr Harris said the Darwin property market had a “steady flow” of first homebuyers but some still struggled to get their foot in the door despite the affordable prices.

“Often the hurdle is the initial deposit with the current cost of living across the country,” he said.

Mr Cooke said school leavers should set themselves up by having a good savings habit and a budget early on.

“Budgeting gives you financial freedom because it lets you allocate money towards ‘fun’ expenses like brunch, Netflix and daily coffees without feeling guilty, or that you’re putting your financial future on the line,” he said.

“Secondly, open a high-interest savings account with a solid ongoing rate of at least 5 per cent, and put as much money in it as possible.”

Originally published as Revealed: The years it will take NT teens to buy their first home