Australian first-home buyers face 4.5 year savings wait to buy property
FIVE years of savings now needed to buy a home in the Victorian capital as unaffordability soars.
HOUSING affordability has worsened during the past year, with first-home buyers needing to save 10 per cent more for a deposit, a report shows.
It was now taking 4.5 years to save for a 20 per cent house deposit, up from 3.7 years in the previous annual report.
Australian couples need to raise $85,800 deposit for a median-priced house, compared with $78,100 a year earlier, the Bankwest analysis showed.
The situation was worse in more expensive parts of Sydney, Melbourne and Perth, with first-time buyers needing to spend a decade saving up for a deposit to enter the property market in 26 local government areas.
Australia continues to be one of the most unaffordable places in the world to buy a house due to a chronic undersupply of housing, Bloomberg reports.
The median price of a home in an Australian city is about $468,000, according to RP Data show, almost double that of the median price of a home in the US, Bloomberg reports.
Units more affordable but still expensive
Saving for a median-priced unit was marginally less daunting, with first-home buyers needing to find $76,900 for a deposit - a four-year task.
Bankwest Retail chief executive Vittoria Scott said a growing army of first home buyers were being locked out as established property owners benefited.
"This is the stark reality of a strong Australian property sector," she said.
Still, home borrowers are likely to have some relief today.
The Reserve Bank is widely tipped to leave interest rates on hold at 4.5 per cent as it focuses on Europe's debt worries instead of domestic inflation.
Booming market is a double-edged sword
Bankwest retail CEO Vittoria Shortt said the study exposed the booming market as a double-edged sword.
"While it's clearly of enormous benefit to established home owners, it's the complete opposite for many of their children. Many potential first home buyers are facing long periods in the rental market," Ms Shortt said.
She said the problem had deepened since first home owners grants were now back at pre-financial crisis levels and house prices had risen.
"Our research shows a 25-year-old hoping to buy a home will be almost 30 when they actually achieve that goal," she said. "It now takes longer to save for a house that it does to complete some university degrees."
REIV chief executive Enzo Raimondo called on governments to increase first home buyer grants for existing homes and cut stamp duty for first home buyers.
- with AAP, Herald Sun