Deposit saving time doubled over two decades

It used to take Sydney homebuyers about eight years to save enough money for a home deposit but the time required has surged to an alarming high.

Saving enough cash for a deposit on a Sydney home will take the average household a record 16 and half years, new analysis reveals.

The 2021 ANZ CoreLogic Housing Affordability report paints a grim picture for potential home buyers, revealing the time it takes to save a 20 per cent deposit at the median property price has doubled since 2001.

Housing values have been rising at a national level since October 2020, with the past 12 months showing the fastest growth for housing on record.

House prices have been increasing at a faster rate than median household income.

Whilst this growth has assisted the country in recovering from the economic hit of the pandemic, there has been a growing gap between home owners and those trying to grab a slice of the housing market.
“The time taken to accumulate a deposit is a particulary important component of housing affordability for first home buyers. This is because those who already own property will often not need to worry about saving a deposit,” the report explained.
“It can be most challenging for first home buyers to get on the first ‘rung of the property ladder’”

Sydney is the most expensive market in the country to buy a property.

Generally speaking, housing is considered to be ‘unaffordable’ when rental costs and mortgage serviceability accounts for over 30 per cent of household income.
Across the combined capital cities, the average dwelling value in the last quarter was $727k.
Sydney ranked last for affordability, beating out other states for everything except rental affordability.
Manly, Warringah, Ku-ring-gai, Pittwater all ranked as the least affordable markets within Sydney.

Rising property values have shifted the demographics of various areas in Sydney.

“It is also likely the rapid rise in property values across regions such as the Northern Beaches in the current upswing has shifted in the demographic of the area to higher income earners.”
Out in regional NSW, it takes 11 years to save for a 20 per cent deposit, requiring 41 per cent of median income to service a new mortgage.
According to ANZ Economist Felicity Emmett, the biggest hurdle for first home buyers across NSW is the deposit for the home.

The amount of time it takes to save up for a house in Sydney has doubled over the last two decades.

“Sydney is the most expensive market across the country in terms of buying a property,” Ms Emmett said.
Gains in median incomes haven’t kept pace with the price of housing in Sydney generally. It’s going to take a long time for things to improve.
Ms Emmett believed the key takeaway from the report was for government regulators to ease the burdens to make it easier to afford a home - particularly for those in their 20’s and 30’s seeking home ownership.
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Originally published as Deposit saving time doubled over two decades