A decade of saving since 2014 doesn’t bring you close to a home deposit in 2025

Eye-opening new research has revealed the devastating reality facing want-to-be homeowners, showing that even if they’ve been saving 15 per cent of every pay cheque for the past 10 years, they’re still nearly five years off.

If you’ve been saving 15 per cent of every pay cheque over the past 10 years, you’d think you’d be able to afford a deposit – but you’re still nearly five years off.

New research from the Australia Institute has found that due to inflating house prices, those who have been consistently saving money for a 15 per cent home deposit are still years away from reaching that milestone in almost every capital city in Australia.

Each state was measured by taking 15 per cent of the average male’s full-time earnings each year and comparing that total to the rising median house price in the state.

If a Brisbane male was saving 15 per cent of their wages since 2014, they still would not be able to afford a home deposit. Picture: Steve Pohlner

If a Brisbane male started saving in 2014, they would have $122,801 – enough for that year’s median 15 per cent deposit of $91,800.

However, a home deposit of 15 per cent in 2024 is $181,500, meaning home buyers would still need more than $58,000 to secure a property.

The Australia Institute’s Chief Economist, Dr Greg Jericho, said rising house prices after the Covid-19 pandemic meant Brisbane buyers were unable to close the affordability gap.

Dr Greg Jericho of The Australia Institute said affording a home on your own wage is essentially “impossible” for the average Australian. Picture: NCA NewsWire / Martin Ollman

“Savers in Brisbane have needed another 4 and half years for the past 4 and half years,” he said.

“It seemed people were making pretty good progress, and then around 2020-2021 when the house prices went up, they basically started treading water.”

This affordability gap grows if you are earning below the average wage for a male, which is higher than both the average wage for a female and the median wage.

The Australia Institute released their findings on Monday, which included the revelation that Sydney buyers actually needed more than double what a deposit would cost a decade ago.

Those earning less than an average Australian male, such as teachers, are even further away from affording a home deposit with their wage.

Dr Jericho said his team was inspired by a comment from former treasurer Joe Hockey, who said in 2015 that people could afford to save for a home so long as they had “a good job that pays good money”.

“I want to see if it’s possible for someone who really has a good-paying job, and they’re actually being diligent with their savings,” Dr Jericho said.

“Even when you do everything that you’re supposed to do, it’s clearly impossible to do on your own.”

Former treasurer Joe Hockey said in 2015 that a home could be afforded if people had “a good job that pays good money”. Picture: Richard Dobson

Dr Jericho said Brisbane, Adelaide and Perth shared similar trajectories in their rising house prices and the deposit affordability gap.

Nationally, the only capital city where you could now afford a deposit after ten years of saving is in Darwin.

With the data representing one person’s savings, Dr Jericho said the only realistic way to afford a deposit would be with a second saver or with help from family finances.

“It’s all very well to say, ‘you’ve just gotta save’, but when house prices keep going up, your savings are never catching up to the deposit, he said. “It really just becomes an endless pursuit.”

Dr Jericho said systems such as the capital gains tax and negative gearing needed to be evaluated going into the federal election.

As the federal election approaches, Dr Jericho said serious conversations needed to be had about housing, pointing to the capital gains tax and negative gearing as systems needing reform.

“The settings that we have at the moment, that have been in place for 25 years now, are not working – in fact, they’re making things worse,” he said.

He added that public housing, which used to take up 10 to 15 per cent of new housing builds, now made up around 2 per cent of the market.

“The public sector has just departed the field,” he said. “We have a system that is pretty much driven all by the private sector.”

Prime Minister Anthony Albanese grew up in public housing at a time where it made up more than 10 per cent of Australia’s housing market. Today, public housing makes up around 2 per cent. Picture: NewsWire / Nikki Short

Dr Jericho said without these conversations, he expected the gap between regular Aussies and home ownership would only grow larger.

“It’s never been easy, but it was at least possible,” he said. “Home ownership is [now] more the impossible dream than the great Australian dream.”

Originally published as A decade of saving since 2014 doesn’t bring you close to a home deposit in 2025